Retirement Communities Stable

They weren’t the sexiest category of real estate in the high-flying days of the boom. Although they were selling.

But now, with prices falling and vacancy rates rising almost everywhere, Southwest Florida’s big fifty five plus retirement communities are turning out to be a solid bet for investors, owners and residents alike, experts say.

“Most people pay cash for their house and they’re very stable people,” said Steve Adler, president and owner of Fort Myers-based Murex Properties, which manages manufactured-home communities nationwide. “In these topsy-turvy times, they’ve remained a good investment.”

Lenders are especially open to borrowers with that kind of collateral, said Paige Rausch, a Fort Myers-based real estate consultant.

She pointed out that two of the top five mortgages by dollar value in Lee County in 2010 were for large manufactured-home developments.

“I think there’s a new caution,” Rausch said. “Those assets that were mortgaged, there wasn’t a lot of gamble about that. They weren’t writing them on pipe dreams.”

Underlying the stability is a way of life, not just the relatively good financial condition of retirees, Adler said. “Residents help people a lot, they take people to the doctor if they don’t have transportation.”

Steve Weisberg, president of Fort Myers-based development company Rarco, said the stable cash flow from rentals – typically the residents own their homes but rent the lots – accounts for their attractiveness as an investment.

But, he said, buying or loaning money on a big retirement development can be a daunting task. “It really takes a special breed of person to put something together.”

Mainly, he said, mortgages are written by large institutions such as life insurance companies.

But the stability of a retirement community tends to work in favor of individual owners as well, said Jim Schneider, manager of the 200-acre, 1,096-unit Seven Lakes community in south Fort Myers.

Seven Lakes is a condominium and not for sale, but its values have held up well for residents, he said – the community has only about 10 foreclosures, about 1 percent.

Because Seven Lakes has been around 40 years, Schneider said, it was spared the wave of defaults on loans “where the mortgage was 110 percent of the home’s value.”

Steve Cunningham, a commercial real estate agent with LandQwest in Fort Myers who frequently works as a receiver or property manager for lenders, said other pluses for lenders are public instead of private utilities, a good location and well-maintained units.

Bill Valenti, president of Fort Myers-based Florida Gulf Bank, said even foreclosures aren’t too harmful for a park where residents own their houses but rent the lots.

Even when a homeowner does default on a mortgage, he said, “The bank comes in, it has to sell the home, and it’s often sold to the park, which usually is able to buy at a deep discount.” Article courtesy of the Fort Myers News Press.

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