Equity LifeStyle to Purchase Manufactured Home Portfolio for $1.43 Billion

Equity LifeStyle Properties (NYSE:ELS) agreed to purchase 76 manufactured home communities from certain affiliates of Hometown America for $1.43 billion.

The properties contain 31,167 sites on approximately 6,500 acres located in 16 states said the REIT on Tuesday.

Assuming the acquisition was completed on January 1, 2010, ELS estimates the purchase price represents a cap rate of approximately 6.7%, and that on a pro forma basis the acquisition would have been 15.6%  (or $0.54 per share on a fully-diluted basis), accretive to pro forma Funds From Operations (FFO) for the year ended December 31, 2010.

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Pro forma FFO has been adjusted to reflect management’s estimates of costs that would have been incurred during the year for property management and additional general and administrative expenses for the Hometown portfolio.  The purchase will increase the size of Equity Lifestyle’s portfolio to 383 communities — 211 manufactured-home communities and 172 recreation-vehicle sites — in 32 states.

ELS’ target demographic are those nearing retirement and the nearly 80 million baby boomers that are thinking about retirement.

“They are drawn to our communities by the opportunity to free up the capital in their homes and reduce the financial stress on their lives, and to open their minds and lifestyles to a more carefree way of life,” said the company in its annual report.

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