Increases Sun Communities’ portfolio to 245 communities totaling nearly 90,000 sites in 29 states with a combined enterprise value of approximately $5.1 billion
Southfield, MI, July 30, 2014 – Sun Communities, Inc. (NYSE: SUI) (the “Company”) today announced that it has entered into an agreement to acquire a portfolio (the “ALL portfolio”) from Green Courte Partners, LLC (“GCP”) sponsored funds. The ALL portfolio consists of 59 manufactured home communities, including those acquired from American Land Lease, Inc. by GCP in 2009. The communities comprise over 19,000 sites in eleven states, including nearly 11,000 sites located in Florida. Over 14,000 sites, or 73%, of the ALL portfolio are age-restricted. In connection with this transaction, the Company will assume GCP’s right to acquire an additional manufactured home community pursuant to a binding purchase agreement.
Total consideration for the acquisition is approximately $1.32 billion, including the assumption of approximately $560 million of debt. The Company will pay approximately $311 million in cash, issue approximately $262 million in a combination of the Company’s common stock and Operating Limited Partnership units, and issue $175 million of newly-created Series A-4 Convertible Perpetual Preferred stock or Convertible Perpetual Preferred Operating Limited Partnership units to GCP investors. Additionally, GCP will be making an approximately $13 million investment in the Company’s equity. Pro forma for the acquisition, GCP investors will own approximately 11%(1) of the Company. Randall K. Rowe, Chairman and Founder of GCP, and James R. Goldman, Vice Chairman and Chief Investment Officer of GCP, will be joining the Company’s Board of Directors.
Commenting on the acquisition, Gary A. Shiffman, Chairman and Chief Executive Officer said: “This transaction significantly increases the scale and diversity of our company. The ALL portfolio represents a very unique opportunity given its high asset quality, leading position in high-barrier markets, and strong occupancy at attractive monthly rents per site. We believe this transformative transaction positions us as a best-in-class player in the industry and enables us to drive shareholder value going forward.”
“Furthermore, this acquisition increases our presence in the attractive Florida market and improves our overall diversification with limited integration risk due to the complementary nature of the Sun and ALL portfolios. The ALL portfolio is over 70% age-restricted and we expect to reap meaningful operational synergies from managing a larger combined portfolio,” Shiffman said.
“Looking forward to the first year under the Company’s ownership and operation post-acquisition, the Company has underwritten the transaction at an estimated 6.0% cap rate based on projected Year 1 NOI and expects the acquisition to be approximately 5.0% – 8.0% accretive to 2015 FFO per share,” Shiffman added.
Randall K. Rowe commented: “We believe the combination of our manufactured home business with Sun Communities will create an industry leading growth platform. I am excited to be joining Sun Communities’ Board of Directors and look forward to contributing to the long-term success of this enterprise.”
The transaction is subject to limited confirmatory diligence and customary closing conditions including loan assumptions, and is expected to close in two stages in late 2014 and early 2015. ##
