CHICAGO-Locally based Equity LifeStyle Properties Inc., chaired by Sam Zell, has closed on the final tranche of 75 residential properties owned by Hometown America LLC, with the acquisition of seven sites for $99 million. The deal closes the six-month-long sale by Hometown of the manufactured home communities, with one RV resort, in Florida and the Northeast for $1.4 billion.
This is the second billion-dollar deal right now for Zell, who through his Equity Residential REIT is trying to purchase a 26.5% interest in Denver-based Archstone for $1.3 billion. Lehman Holdings, which has 47% of Archstone, is trying to block the sale by Bank of America and Barclays Bank, which own the other 53%.
It was reported Friday that Lehman, which has the right of first refusal but has been bogged down by its recently approved Chapter 11 bankruptcy, may match the Equity bid as soon as this week. Lehman, Archstone and Equity representatives did not return calls for comment.
On May 31, Equity LifeStyle and Hometown announced the manufactured home portfolio purchase. The acquisitions were made in sections throughout the summer and in October, with the last deals taking place Friday. The sales consist of 31,167 sites on about 6,500 acres in 16 states, with most of the properties located in Florida. Equity purchased the sites using debt and equity financings, as well as more than $200 million in stock sales to Hometown.
Rich Cline, CEO of Hometown, said in a May 31 letter to his employees that the sale, along with another 16 properties in a separate disposition, would leave his Chicago-based company with only 32 remaining properties by this month. He told his workers in the letter that the business has changed considerably since the firm was founded in 1998. “The communities we are keeping have the investment characteristics consistent with our original objectives and, over time, we plan to grow by selectively acquiring assets that meet our investment criteria,” Cline said in the letter.
Cline also said he hoped that his employees would be hired by Equity, which owns or has an interest in 382 manufactured home properties in 32 states. The company leases individual development developed areas, or sites, with access to utilities for placement of factory-built homes, cottages, cabins or recreational vehicles.
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