Pinetree Park ROC – Deerfield Beach, FL

February 28, 2007 - Union Capital Investments, LLC provided permanent financing in the amount of $16,800,000 for the acquisition of Pinetree Park ROC. This high quality park was acquired and converted to a Resident Owned Community for a purchase price of $21,000,000.  The buyer was a newly formed entity comprised of the new shareholders of the park.  The 6.00% fixed rate loan represents 80% of both the appraised value and the purchase price. A rent increase is going into effect in November of 2007, increasing rents to $600 per site, and was included in the underwriting; however, because the loan closed prior to collecting the rent increase, a reserve was established to cover the shortfall until the rent increase goes into effect. A seasonal reserve was also established at closing. The loan was underwritten to a 1.32 debt service coverage ratio based upon the park operating as a conventional MHC, with all shareholders and current tenants paying market rents. The loan is for a term of 10 years and payments are interest only.
The acquisition of the park by the current tenants insures that the park will not be converted to an alternative use in the future, and allows them to insure they control the future direction of the park. There were a number of special features in the loan structure which were designed to accommodate the special nature of the owner:

• Shareholder Maintenance Fees must be set at a level which, when combined with rent from the remaining tenants will result in a 1.10 debt service coverage ratio.
• A portion of the proceeds of the sale of future shareholder units may be deposited with the Lender. These deposits may be used to pay down up to 10% of the principal balance of the loan without penalty, and part will be used to subsidize operating costs in order to reduce Shareholder Fees.

Pinetree Park ROC is a 317 site 3.5-star age-restricted community, developed in 1968. The total land area is 44.87 acres, and the overall density is 7.06 spaces per acre. Amenities include a 50 boat slip marina with direct access to the intra-coastal waterway and the Atlantic Ocean; a leasing office/clubhouse housing a recreation/gathering hall, a billiard room, an exercise room, common area restrooms, a kitchen, an office, and a laundry facility; a lighted tennis court, heated pool and spa, four shuffleboard courts, six bocce ball courts, and two horseshoe pits. Pinetree Park has a history of good occupancy, and is well located in a middle class neighborhood surrounded by the upper end residential communities of Boca Raton and Deerfield Beach.