Flagship Communities seeks $79M (U.S.) in acquisitions

Executive Summary

• Flag Communities Real Estate Investment Trust announced two strategic acquisitions totaling $79 million (U.S.) to expand its presence in Indiana and Ohio, which are expected to be immediately accretive to adjusted funds from operations on a per-unit basis.
• The REIT completed the acquisition of a manufactured housing community (MHC) in Seymour, Indiana, for approximately $45 million, financed primarily through new debt.
• The REIT also agreed to acquire a portfolio of three MHCs in the greater Cincinnati, Ohio, market for $34 million, expected to close in November 2025, financed by assumed debt and additional financing sources.

Key Details

• Total Consideration: $79 million (U.S.) across two transactions.
• Seymour, Indiana Acquisition:
  • Status: Completed.
  • Price: Approximately $45 million (U.S.).
  • Financing: Primarily through new debt financing sources.
  • Asset Details: 744 lots total; 91.2% occupied; includes 85 lots for future expansion.
  • Location: Halfway between Louisville, KY, and Indianapolis, IN; close to major employers (Walmart, Schneck Medical Center, Valeo, Cummins, etc.).
• Greater Cincinnati, Ohio Acquisition:
  • Status: Agreed to acquire; due diligence waived; expected closing in November 2025.
  • Price: $34 million (U.S.).
  • Asset Details: Portfolio of three separate MHCs (Cleves, New Richmond, and Morrow, OH); 496 lots total; 65.5% occupied.
  • Financing: Assumption of $14.3 million (U.S.) of existing debt at a weighted-average interest rate of 2.84%, plus additional debt financing.
  • Location: Within a 30-minute drive of Flagship’s main office in Fort Mitchell, KY.
• Overall Financing Structure:
  • The acquisitions are being financed with a new $70 million (U.S.) unsecured term loan.
• Strategic Rationale:
  • Acquisitions are consistent with Flagship’s strategy of acquiring underperforming MHCs with significant vacancy to add value through occupancy growth and lot expansion.
  • Expected to generate economies of scale and operational synergies in key markets.

Notable Quotes

• Kurt Keeney, President and CEO: "These strategic acquisitions expand Flagship's presence in our key markets of Indiana and Ohio, thereby enabling us to generate economies of scale and operational synergies... we expect these acquisitions to be highly desirable home ownership options that will also add value for unitholders."
• Nathan Smith, Chief Investment Officer: "These acquisitions are another example of our ability to secure off-market opportunities through our long-standing industry relationships and operating expertise... These MHCs also have significant growth potential as we look to add amenities, increase occupancy and pursue lot expansion."