The law firm of Adams and Reese has closed a $75 million sale of a 1,168-lot, 55+ mobile home community in Zephyrhills, Florida, representing one of the largest transactions of its kind in the Florida manufactured home industry. The June 2016 sale of Forest Lake Estates to a large national real estate investment trust secured a high return on investment for community shareholders who originally banded together to purchase the mobile home park in 1999.
Adams and Reese St. Petersburg real estate attorney David S. Bernstein served as legal advisor for the transaction and worked closely with Brett Schroder, president of Premier Community Management, Realty and Mobile Home Sales, Inc., former management company of the park, to complete the transaction.
“Forest Lake Estates is a historically resident-owned community that, over the years, had experienced the common challenges of shareholder ownership, such as frequent board turnover, disagreements over community management providers, low cash reserve, unfilled vacancies, and an overall clouded long-term vision of the park,” Bernstein said. “The ultimate sale of the community garnered a roughly 94% approval rating from shareholders and successfully recognized their equity at a peak of the market.”
The sale to the REIT, one of the largest in the U.S., included future provisions to enhance community amenities and services, rent increase caps for 10 years, prepaid rent credits for use toward future rent increases, and a requirement that Forest Lake Estates remain a mobile home park for 20 years. The transaction closed after nearly 8 months of due diligence and negotiations.
Forest Lake Estates’ sale marks one of the largest of its kind in Florida history. It may also serve as a blueprint for shareholders in other manufactured home communities looking to retrieve their equity after weathering the challenges of resident ownership and without sacrificing the quality of their communities.
“There were many challenges and roadblocks in the history of Forest Lake Estates that are common among other resident-owned communities,” Schroder said. “Ultimately, Forest Lake residents were able to sell at a peak of the market and make good on their long-term investment.”