Flagship Communities Real Estate Investment Trust Expands Presence in Kentucky With Acquisition of 504-lot Manufactured Housing Community

Executive Summary

• Flagship Communities Real Estate Investment Trust has acquired a 504-lot manufactured housing community (MHC) in Georgetown, Kentucky, from Empower Park, LLC.
• The acquisition is funded via cash on hand and approximately $17 million in assumed debt at an average interest rate of 3.5%.
• The property is currently 71.8% occupied, offering significant upside potential, and features recent capital improvements including new amenities and infrastructure upgrades.

Key Details

• Target Asset: 504-lot manufactured housing community located in Georgetown, Kentucky (spanning Fayette and Scott Counties).
• Transaction Structure: Acquisition from Empower Park, LLC.
• Funding: Funded using cash on hand and approximately $17 million in assumed debt.
• Debt Terms: Assumed debt carries an average interest rate of 3.5%.
• Occupancy: Currently 71.8% occupied, with management citing attractive occupancy upside potential consistent with the REIT’s strategy of acquiring under-occupied MHCs.
• Recent Improvements by Seller: Since 2022, Empower removed ~50 older homes, installed new amenities, re-installed all new sewer lines, re-surfaced all streets, and decommissioned a wastewater treatment plant.
• Current Amenities: Two municipal grade playgrounds, four new basketball courts, a new dog park, and a new community center.
• Strategic Rationale: Acquisition aligns with growth strategy to source high-quality opportunities within existing footprint (Kentucky), generating economies of scale and operational synergies.
• Location Context: Located near I-75 and I-64 in Central Kentucky near Lexington, one exit from the Kentucky Horse Park, near major employers and highly rated schools.
• Financial Impact: Expected to be accretive to the REIT’s adjusted funds from operations (AFFO) per Unit.

Notable Quotes

• “The acquisition of this MHC demonstrates our growth strategy by sourcing high-quality opportunities within our existing footprint, which enables us to generate economies of scale and operational synergies,” said Kurt Keeney, President and Chief Executive Officer.
• “This MHC aligns perfectly with our strict acquisition criteria of being in a prime location within a market where we operate, which will allow us the opportunity to streamline our operations given our strong presence in Kentucky,” said Nathan Smith, Chief Investment Officer.