Flagship Communities acquires 96-lot asset in Ohio

Executive Summary

• Flagship Communities Real Estate Investment Trust has acquired a 96-lot manufactured housing community (MHC) in Cleves, Ohio, from Empower Park LLC.
• The acquisition is part of the REIT's disciplined growth strategy to expand its presence in key markets, specifically following recent purchases in the greater Cincinnati area.
• The transaction was financed through a combination of cash on hand and the issuance of Class B units, with the purchase price reflecting a discount to the appraised value.

Key Details

• Asset Details: The acquired property is a 96-lot MHC located in Cleves, Ohio, near Interstate 275 and the Ohio-Indiana border.
• Occupancy and Potential: The community is 96% occupied, offering upside potential. It also includes future land expansion potential for an additional 12 lots.
• Improvements: Since 2022, seller Empower Park LLC has completed significant infrastructure upgrades, including new street paving and solar lighting, as well as new amenities such as a clubhouse, playground, ball field, and basketball court.
• Purchase Price: Approximately $6 million, representing a 5% discount to the acquisition's appraised value.
• Financing Structure: The acquisition was financed via cash on hand and the issuance of Class B units by Flagship Operating LLC.
• Unit Pricing: The Class B units were issued at $19.54 per unit, representing the 10-day volume-weighted average price (VWAP).
• Legal Basis: The terms are pursuant to a right of first offer agreement dated October 7, 2020, between Flagship Operating and Empower.
• Strategic Context: This is the third high-quality MHC acquired in Cleves by Flagship, strengthening their presence in the Cincinnati market and aiming to improve operating efficiencies and economies of scale.

Notable Quotes

• "This acquisition reflects the disciplined growth strategy that has defined Flagship for more than 30 years -- buying established communities with occupancy and growth potential," said Kurt Keeney, president and chief executive officer.
• "We are very fortunate to acquire a third high-quality MHC in Cleves, Ohio... we expect this acquisition will continue to allow the opportunity to improve operating efficiencies and generate economies of scale," said Nathan Smith, chief investment officer.