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February 9, 2010 |
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| November 03, 2009 |
By: Eric Kalis |
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nvestors are rediscovering mobile-home parks as affordable places for people to live.
During the residential boom, multifamily builders coveted mobile-home parks for their redevelopment potential. As land became scarce, the usually large parcels became targets for developers eager to build rental apartments and condo complexes.
Residents, usually low-income and often elderly, faced eviction to make way for more profitable uses. Lawsuits were filed, and some cities and counties imposed moratoriums and other restrictions to prevent their redevelopment.
Now, as South Florida’s multifamily market struggles to rebound, investors are seeing the potential of maintaining properties as mobile-home parks, or at least in not building costly conventional residences.
One former mobile-home park in Margate, which was slated to be the site of a residential development, recently sold for $15.75 million and is to become a high-end RV resort.
A mobile-home property in Homestead sold last month for $7.2 million, providing a modest profit for its sellers in an otherwise tough real estate market.
And Miami-Dade County commissioners today are scheduled to consider whether to extend a temporary moratorium on issuing building permits to park owners and developers who might still harbor plans to redevelop the properties.
MARGATE PROPERTY
The 106-acre Margate property at 1 S. Cortez Drive was purchased Oct. 16 by a Canadian investment group that wants to build a high-end RV resort. The seller was Birmingham, Mich.-based Uniprop Manufactured Housing Communities Income Fund.
Uniprop operated the property as a mobile-home park for nearly three decades before Hurricane Wilma severely damaged the complex in 2005. Margate rezoned the site to allow Uniprop to build a 707-unit residential development called Aztec Estates.
Uniprop’s plans fell through as the real estate market and economy soured.
Coral Springs attorney Louis St. Laurent II is vice president of Aztec RV Resort, a company composed of nine friends and investors. Aztec is financing the resort’s development with a $21.5 million loan from 9213-5037 Quebec Inc., a company owned by several of the Canadian investors, said St. Laurent.
Although the property seems headed back to its roots, former residents probably won’t recognize the place after it is redeveloped.
Prices on the 646 lots for recreational vehicles will range from the low $100,000s to $300,000, St. Laurent said. Lot owners must have self-propelled RVs valued at more than $500,000, he said. Lot owners can stay at the resort for up to 10 consecutive months and can lease the lots to other RV users when not occupying them.
Margate has rezoned the property to allow the resort, and Broward County and state approvals are pending, St. Laurent said.
Now that demand for new residential projects has evaporated, mobile-home parks are gaining the attention of investors who are happy to operate them as traditional communities of manufactured homes or RV resorts, said attorney David Bernstein, a partner in Ruden McClosky.
Bernstein, who was not involved in the Aztec or Homestead deals, chairs the law firm’s National Manufactured Housing Practice and has specialized in mobile-home law since the state instituted the Florida Mobile Home Act in 1984.
“This is not nearly as labor-intensive or permit-intensive as other types of development,” Bernstein said.
RV resorts currently have more cachet than mobile-home parks in the eyes of operators and investors, he said.
“I have seen a number of mobile-home owners transition into RV ownership,” Bernstein said. “The RV market is growing as people want the flexibility of being able to leave without the downside of being tied down in a mobile home.”
While some investors are eyeing the RV market, most parks that survived the redevelopment push have a future, Bernstein said. Mobile homes can be an affordable housing alternative for Floridians who have lost jobs or homes to foreclosure.
“There’s a greater need for affordable housing, and mobile-home parks provide that,” he said.
In Miami-Dade, one longtime mobile-home park operator added to its holdings. Florida Manufactured Housing Services, operating as Boardwalk RV and Mobile Home Resort, paid $7.2 million for a 27-acre mobile-home and RV park northeast of Homestead Boulevard and East Mowry Drive in Homestead on Oct. 19. The seller is C.B.Y. Development, which bought the park for $6.38 million in May 2004.
Florida Manufactured Housing assumed a $6.65 million loan from General Electric Capital, according to Miami-Dade records.
“It is obviously very difficult to find financing for any acquisitions right now,” said James Bellinson, Boardwalk’s Detroit-based managing member.
“General Electric financed this deal [through a loan assumption], and they have been very good with their existing customers in supporting them.”
Bellinson declined to discuss the company’s plans for the Homestead park.
While the Margate and Homestead deals went through without direct bank financing, some lenders are providing loans. In unincorporated Palm Beach County, a company called Live Oak Land Hood Road obtained a $12.2 million loan from BB&T on Oct. 7 for a 107-unit park on 10 acres at 4063 Hood Road, according to Palm Beach County records.
Live Oak manager Joseph Lelonek did not return calls. Representatives of BB&T also did not immediately respond to a call seeking comment.
Revisiting Moratorium
Although apartment and condo developers have lost interest in mobile-home parks, Miami-Dade’s October 2007 temporary moratorium remains in place. Miami-Dade county commissioners will revisit the moratorium today.
The moratorium does not prohibit park owners from closing the communities or evicting residents, Bernstein said. Governments can only issue temporary moratoriums and incrementally extend them because a permanent moratorium would violate a mobile-home owner’s property rights, he added.
“With a permanent moratorium, the government is essentially taking the property and would owe damages to the owner,” he said.
At this point, an official moratorium is not necessary, Bernstein said. The enthusiasm of investors looking to convert mobile-home park properties into residential developments has waned.
“For about 12 to 18 months, there has been an economic moratorium,” he said. “Developers are not buying these properties with fervor.”
Eric Kalis can be reached at (305) 347-6651.
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