Thousand Trails Inc., the largest operator of membership-based campgrounds in the United States, said that the recent agreement with Manufactured Home Communities Inc. (MHC) would not result in any operational changes at the company’s 57 parks.
“The transaction is an opportunity for us to provide value for our shareholders while establishing a long-term partnership with MHC,” Thousand Trails President John Malone stated. “Our members and employees will not see significant changes in our preserves or how we operate our business. After the transaction, we’ll still have the same management, the same employees and be in the same business of operating our preserves, selling memberships and serving our members.”
Chicago-based MHC purchased the real estate holdings of Thousand Trails, Inc. for $160 million, including about 3,000 acres of vacant land. Frisco, Texas-based Thousand Trails, which has 108,000 members, will continue to operate its 57 campgrounds through a 15-year leaseback arrangement, with two five-year renewal options. Thousand Trails also has the option to buy back the land at the end of the 25-year option period.
Malone said that MHC will likely develop the 3,000 acres of vacant land. “There’s no value being realized in that land,” Malone said. “So if you have 3,000 acres of land you’re not utilizing, and you have a partner that has an interest in adding value by developing the property, it makes sense to do it.”
Although Malone said that it’s premature to discuss long-term plans for collaboration between Thousand Trails and MHC, he added that the businesses complement one another. Thousand Trails, he said, provides the settings for RV and cabin-camping experiences for individuals and families seeking an active, outdoor recreational experiences.
Most of MHC’s business, on the other hand, involves manufactured home communities, although the company has recently been acquiring campgrounds and RV parks.
A self-administered, self-managed, real estate investment trust (REIT), MHC currently owns or has a controlling interest in 209 RV, park model and manufactured home properties with 80,028 sites in 23 states.