BREAKING NEWS
Equity LifeStyle Acquires Thousand Trails
Jeff Crider
RV Business
Friday, August 15, 2008
Equity LifeStyle Properties Inc. (ELS) has acquired the Thousand Trails campground membership club and other assets of Privileged Access, a Frisco, Texas-based holding company owned by ELS President Joe McAdams.
ELS, a Chicago-based real estate investment trust (REIT) that had previously purchased Thousand Trails’ real estate assets in 2004, completed its acquisition of Thousand Trails’ campground membership business and other assets of Privileged Access on Aug. 14 for $2 million, according to an ELS press release.
Privileged Access is an RV and vacation membership business with nearly 128,000 members and 82 properties, most of which are affiliated with Thousand Trails and Outdoor World Corp. ELS owns or has an interest in 309 RV resorts and manufactured home communities in 28 states and British Columbia.
While Privileged Access will continue to maintain an office in Frisco, the acquisition will result in the loss of about 50 jobs at that location, while ELS’ Chicago staff will see a net increase of “about 15 to 20 employees,” McAdams said.
The transaction was made possible after ELS received favorable legal opinions regarding the qualification of campground membership contract income for REIT gross income test purposes.
McAdams told RVBusiness that the acquisition reflects the company’s continuing financial strength in the private park business at a time when the industry has suffered from rising fuel costs, falling consumer confidence and declining RV sales. ELS recently announced that it expects core property operating revenue for 2008 to increase by 3.5% to 4% over 2007 figures, assuming stable occupancy, with a 2.5% to 3% increase in net income.
But while McAdams succeeded in helping Thousand Trails to achieve its highest membership sales in the history of the company last year, he said it became increasingly difficult for Privileged Access to sustain this momentum during the current economic downturn. Thousand Trails’ year-to-date membership sales were down 27% at the time of the ELS acquisition compared to the same period last year, he said.
Privileged Access reported cash revenues of $39.99 million for the second quarter, down from $42 million a year earlier, with revenue of $70.99 million for the six months, down from $73.1 million a year earlier. The company also reported a net second quarter loss of $1.19 million, compared to a loss of $1.6 million a year earlier, with a loss of $2.16 million for the six months, compared to a net gain of $1 million a year earlier. The firm recorded 539,908 camper nights for the second quarter and 945,686 for the six months, respective declines of 4.9% and 4.8%, while its membership base declined by 4,078 to 127,910 members.
McAdams formed Privileged Access as a holding company for campground membership clubs in 2005 after stepping down as CEO of Ventura, Calif.-based Affinity Group Inc. (AGI).
McAdams hoped to use his campground membership club holdings to create the tiered membership programs that give people exactly what they want in terms of locations and amenities, an innovative concept for an industry that has traditionally used a one-size-fits-all approach. McAdams was also working to improve the facilities and amenities at Privileged Access parks and to expand his use of park models. But these initiatives ultimately required more capital than Privileged Access could produce, particularly in a down economy.
“I never really had the financial resources to do what I dreamed of doing with Privileged Access,” McAdams said. “But with ELS’s income, we will be able to do what I always wanted to do with Privileged Access.”
The transaction also enables McAdams to avoid potential conflicts of interest between ELS and Privileged Access. McAdams was appointed president of ELS on Jan. 1 and was required to step down from his positions as chairman, president and CEO of Privileged Access before becoming president of ELS. McAdams still stills on the Privileged Access board, however, and retains 100% ownership of the company.
ELS, for its part, will benefit from the marketing opportunities that result from its ability to expose its campground club members to other RV, park model and manufactured home resorts and communities in the ELS network, McAdams said.
Steve
2007 Springdale 291RKL
2003 F150 King Ranch
2001 Dodge Van w/Wheelchair Ramp
1991 Palomino Mustang PUP
Eureka Timberline Tent
Yamaha IF2400isc
Yamaha EF3000iSEBC "Politically Incorrect And Proud Of It"
As long as they don't mess with my membership it should not concern me. There have been a lot of changes in the 25 years that I have been a member and each time TT tries to get me to upgrade my membership for more money. Never have and never will if I can keep from it. I like my $280 a year dues and unlimited camping
It sure would be nice if they could update some of the parks in the system. We recently purchased a TT/Leisure Time membership and so far the parks we have visited are in poor shape and in need of updating. We are presently at Crescent Bar and the power here is so bad we had to move to a different loop just to be able to run one air conditioner and nothing else. Several people went down to report the power problems to the ranger and all they were told is "We are aware of the power problems but there is nothing we can do about it"
Brian & Loretta
Chance (Golden Retriever)
2004 National Tropi-Cal T396
2005 Suzuki XL-7 toad
We moved!! No more nasty neighbors, no more rotten parking. I am saving this picture just to remind myself how bad it was.
I wouldn't expect a lot of change if they are just shuffling ownership on paper, under the same management and financial umbrella, to gain some tax rule advantages. How much did Camping World change when it was "sold" within the same group?
I think this announcement is much more directed to potential financial investors, than to TT membership.
I have never regretted saying, "no thank you" following a presentation at a local Thousand Trails campground after a very heavy sales push. I just did not see much in return for the upfront cost(which started at over $18,000 and was slowly whittled down to under $5,000) and yearly dues. The campgrounds did indeed look tired and worn out, drastic contrast to the independent campgrounds/rv parks we visit each year. I did not want to be tied down with a limited selection or saddled with yearly dues, makes no sense to me for our needs. Does it not seem odd, selling price was only $2 million?
Capt Skup
AD-1(AW)USN Ret.
Wonderful Wife, 3 beautiful Daughters
"Never get in a battle of wits with an unarmed man"
Where as I see the dues as being equal to about 2 weeks stay at one of the parks we like to stay at.. So far I've no complaints, I think my membership has paid for itself.
Something to consider, I've been parked here at TT-St. Clair for 2 weeks now, other than my regular dues payment NO charge
Parking is 20/night in this area
that's 14 * 20 = 280 dollars.. I'm close to my dues just on one stop
Nothin adds excitment like something that is none of your business John is Near Kenwood TS-2000 housed in a 2005 Damon Intruder 377
Excerpt from the above................
Privileged Access reported cash revenues of $39.99 million for the second quarter, down from $42 million a year earlier, with revenue of $70.99 million for the six months, down from $73.1 million a year earlier. The company also reported a net second quarter loss of $1.19 million, compared to a loss of $1.6 million a year earlier, with a loss of $2.16 million for the six months, compared to a net gain of $1 million a year earlier. The firm recorded 539,908 camper nights for the second quarter and 945,686 for the six months, respective declines of 4.9% and 4.8%, while its membership base declined by 4,078 to 127,910 members."
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