Meridian Orchestrates $150M Financing Deal for Manufactured Housing Portfolio

Meridian orchestrated $150 million in acquisition and permanent financing for Matrix Realty Group's $165 million purchase of a group of 11 communities, which encompasses an aggregate 5,347 pad sites in Michigan and Alabama.

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Matrix Realty Group has purchased a manufactured housing portfolio from Equity LifeStyle Properties Inc., and the company has Meridian Capital Group L.L.C. to thank for securing the funds for the transaction. Meridian orchestrated $150 million in acquisition and permanent financing for Matrix’s $165 million purchase of the group of 11 communities, which encompasses an aggregate 5,347 pad sites in Michigan and Alabama.

Meridian negotiated a five-year, fixed-rate financing package with one-year of interest only payments and a 30-year amortization period. “This was a challenging transaction to place debt for given the high leverage of 90 percent, relatively low occupancy and 30 day closing,” Tal Bar-Or, managing director with Meridian, told Commercial Property Executive. Meridian made the deal happen in just 27 days.

The majority of the collection of manufactured housing communities is in Michigan and includes Avon on the Lake in Rochester Hills; Cranberry Lake in White Lake; Old Orchard in Davison; Royal Estates in Kalamazoo; Fairchild Lake in Chesterfield; Westbridge Manor and Westbrook in Macomb; Oakland Glens in Novi; Grand Blanc Crossing in Grand Blanc; and Holly Hills in Holly. Greenpark South in Pelham, Ala., completes the group. The portfolio consists of both individually owned residences and rental homes.

Meridian is keeping mum on the source of the financing, but Bar-Or added that, “to accomplish what the client needed it required Meridian bringing in three lenders to complete the capital stack.” And again, it all happened in less than a month.

It’s still a difficult lending climate for the manufactured housing sector.  As noted in a mid-year report by Marcus & Millichap Real Estate Investment Services,” Although financing by local banks has expanded for Class A and B assets, lending is still difficult for Class C properties, and many assets are sold with owner financing or cash.”