Sale of West Palm Beach County Mobile Home Community One of the Largest in Florida History, Attorney Says
The 928-lot, resident-owned 55-plus Palm Lake Estates mobile home community was sold to a national NYSE real estate investment trust.
The Palm Lake Estates mobile home community has sold to a national NYSE real estate investment trust for $70 million, St. Petersburg real estate attorney David S. Bernstein announced.
Bernstein, with the law firm of Adams and Reese, served as legal advisor for the transaction and worked closely with President Bonnie Richter and members of the Board of Directors of the resident-owned community to complete the transaction. Bernstein has represented resident-owned communities for more than 30 years in his practice and pioneered conversions of mobile home parks to resident-owned cooperatives in the mid-1980s.
The sale, Bernstein said, is one of largest of its kind in the Florida manufactured home industry. The sale of Palm Lake Cooperative secured a very high return on investment for community shareholders, and removed their ownership risk while insuring needed improvements will be made to the community.
Palm Lake Cooperative became resident-owned in 1989. The community operated as a cooperative and over the years had experienced the common challenges of shareholder ownership, such as frequent board turnover, disagreements over community management, low cash reserves, unfilled vacancies and the lack of any long-term vision of the park.
Bernstein said, “The sale of the community garnered a roughly 90 percent approval rating by shareholder vote and allowed the shareholders to recognize significant equity at the peak of the real estate market.”
The sale Bernstein negotiated included provisions to enhance the community amenities and services, assumable rent increase caps for 10 years, the payment of corporate debt obligations and a requirement that Palm Lake Estates remain a mobile home community for 20 years. The transaction closed in December after over 12 months of workshops, due diligence and negotiations.
Palm Lake Estates’ sale marks one of the largest transactions of its kind in Florida history. Bernstein added, “This successful transaction can serve as a blueprint for shareholders in other manufactured housing cooperatives looking to retrieve their equity after weathering the challenges of resident ownership without sacrificing their quality of life.”
President Richter said, “There were many challenges and roadblocks in the history of Palm Lake Cooperative that are common among other resident-owned cooperatives. Ultimately, Palm Lake Cooperative shareholders sold at the peak of the market and made good on their long-term investment.”
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