Talk of The Villages Florida - Apartments...Why??

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Without the financial support of Villages residents for decades the Morse Family would not have reached their level of success. The comments on this link are concerning. It is an ethical and transparency responsibility of the Morse Family to HONESTLY respond to the comments provided. We have little control over their plans for the future but at a minimum we deserve to be informed of them. I will interpret NO RESPONCE as being complicit in support the statements provided.

Quote:

Originally Posted by dewilson58 (Post 1822400)

What were your assumptions in order for the family to cash out with a billion each?? 10% return on apartments, 90% occupancy, five times earnings, etc. Jus wondering. My quick and dirty indicates it would be over 100,000 apartments. They have less than 1,000 apartments now. I don't think the sky is falling in my lifetime.

Please share...............we bean-counters need facts.

The estimate of the worth of each of the Morse siblings wasn’t mine. I just used their worth as estimated by Forbes when they added all three to their listing of the Forbes 400 richest people in the world.

But I agree with you that the steps necessary to increase the repeatable earnings of The Villages enterprise will take a few years.

Quote:

Originally Posted by Villages Kahuna (Post 1822292)

I’ve thought about why this latest generation of the Morses has purposely and callously begin to change the character The Villages, and the relationship with residents it has taken decades to develop. The construction of densely-sited apartments at Brownwood were first. Then the destruction of Hacienda Hills CC and announcement of another large high-rise building, and recently plans to build apartments in the recently-closed resident’s club, Katie Belles. I believe this is just the beginning. I think I know why.

These actions are what is necessary if the Morse family has plans to sell their ownership interests in The Villages or take the business public. The Villages is profitable, no doubt. But it doesn’t have enough consistent, repeatable earnings to maximize it’s value in such a sale. Repeatable less risky earning flows are what financial buyers and the capital markets use to value businesses.

Businesses are valued as a multiple of earnings, whether sold to a single financial buyer, sale to a public company, or as an IPO on the stock market. Yes, The Villages has some repeatable, consistent and growing sources of earnings—rent from all the shopping centers and the town squares retail, the bank, the championship golf clubs. But just not enough repeatable income to optimize it’s value, which is how the capital markets will value The Villages.

Without a stronger source of repeatable, growing income The Villages as a business will be valued as just another home builder. Profits are great so long as the owners keep buying land, building houses, and selling them to new residents. But if they ever stop that cycle, earnings drop dramatically. The capital markets are forward-looking and will ascribe a much lower multiple to the home-building part of the business than to the parts that will be ongoing if the three Morse siblings who currently own The Villages leave or retire. To increase the value of the Morse ownership more retail, apartments, or somehow monetizing their ownership of everything in The Villages not owned by residents will be necessary.

The three Morse siblings are each billionaires individually, according to Forbes magazine. But it’s all “paper wealth”. If they sold their ownership of The Villages, it would be worth nowhere near that amount. They’ve reached an age when they are almost certainly considering retirement. And among the dozens of Morse-Schwartz grandchildren and great grandchildren, there are only a few as talented as the siblings who want to work as hard as they did, or work for The Villages at all.

Selling the business is the only way the siblings can monetize their long, successful careers and retire. And to increase it’s value the business needs more repeatable, less risky sources of earnings. Unfortunately, achieving those objectives will probably require a change in the relationship and trust that tens of thousands of people who have “bought the dream” have placed in them.

I don’t have any inside information, but I did retire after a long career as an investment banker. I don’t want to be a Debby Downer, but what I see are owners that are preparing to “cash out”. It won’t happen overnight, it might take a few years, but don’t think we’ve seen the end of efforts to monetize their ownership by the Morse siblings. There will certainly be more apartments, such as in the new “non-resident” section adjacent to the new school complex and who knows what in the recently-announced 400 acre medical business section in the southern part of The Villages. I think that some of the amenities that have been free until now, will carry a cost in the future.

If you see something differently, post your feelings here. All I’m saying is that we should all remain aware of what’s happening that might change “Florida’s Friendliest Hometown”.

I think that the Morses are doing what they have always done well. Changing to keep up with the times and the market and changing as their customers needs change. I do not see that they are "changing things in a callous manner".

They have a ready market for this very successful place for years to come if they want to continue. And if they don't. That is their choice. Someone will come and not do it as well. I have watched businesses being bought and sold for decades and the first thing the new owner or director does is try to do it a new and better way when it was a raging success. Remember some years back the new CEO of JCPenney nearly killed the company by changing it's focus from middle class clothing and great drapes and good underwear for kids to being a trendy junior store?

Anyway, I will remind everyone that a steady market of people turning older are looking to join us here in The Villages. Why NOT? It's a great place.

baby boomers retiring every day - Bing

Quote:

Originally Posted by Villages Kahuna (Post 1822292)

Some people will die, end up in heaven, and still find something to complain about

Thanks. You have presented an insightful interpretation of the facts many of us have observed. Your comments and the other people who added further comments did not seem to address a potentially important question. What, if anything, can we, the residents, do about all this? We bought into the dream and promises. Can we protect our assets and the standard of living we've come to enjoy?

Prior to moving to TV, I lived in a condo association on an ocean front. Our homes were all individually owned and stand-alone. We had one common pool and we paid the developer an amenity fee. The developer who was very much in the pockets of city council also owned an adjacent piece of land and wanted to put up a high-rise apartment building. The developer had a reputation of building very attractive structures whether it was commercial or residential and we were told that it would increase our property value. Homeowners were less than optimistic and put together a legal team to fight the development as there were many million dollar homes in eye sight of this property. For years, homeowners were able to block the development based on environmental impact, but I had a gut feeling that sooner or later the developer would win out. In addition, over time our amenity fees increased from $85/month to over $250/month and there was no legal cap; each year the fees increased. With the concern that traffic would substantially increase (we had only one street that entered our subdivision that we would all be sharing) and knowing that my backyard would be in view of this proposed project, I made the decision to sell. My house sold quickly, after all, it was practically on the beach. Since then, the high rise was built and I’ve continued to stay in touch with my neighbors who informed me that as soon as the construction was completed, the developer sold it all, to include oversight of the association property. Although most of the apartments were sold as condos, my neighbors have noted that new management has failed to keep up with owners renting them out on **** and AirBnB. The homeowners have again tried to fight this, but the city will not take action. My neighbors have reported that their amenity fees increased to $600/month, traffic is a nightmare and although their assessed values have not decreased, homes are on the market 6 months or more and are selling roughly at what they paid for them and sometimes at a loss after realtor fees.

At present, there are five villas around me for sale. The units for sale are lovely, fully furnished, some professionally decorated including the golf cart, and are only a few years old. In my opinion, they are priced very well, basically what they paid for them a few years ago plus realtor fees and maybe $10k to cover furnishings. The units are in a great location (between Sumter and Brownwood), poured concrete and include the most popular floor plans, but the only ones sold in the last 6 months were corner units as buyers are inclined to purchase new units South of 44.

Watching the changes in the Villages concerns me as it must many homeowners. I retired very young. I’m not 100% sure this is my forever home. Perhaps I missed out on my opportunity to sell at a profit, but I do hope the changes made don’t significantly impact me. I hope our amenity fees remain relatively stable (although I know that’s wishful thinking). More so, I hope all the new construction doesn’t create such a saturation of new homes that I can’t sell if I choose to go that route. In the meantime... there are plenty of great buys in my neighborhood.

Quote:

Originally Posted by graciegirl (Post 1822515)

I do think something different. And if the worst happened and they sold it? Well I am sure you are more than a dozen years older than when I first read you on this Forum. We can't change the future and we really don't have as much of it to enjoy as we did some years ago.

I trust in the integrity of Jennifer, Tracy and Mark. I see no reason not too. I see what I perceive as a recent rather organized attempt to discredit them that I really think is in part political.

So I disagree. I have very few good qualities but I will admit being vain about my judgement on people's character. I am not wrong too often.

I'm curious; since you place great stock in your ability to sense "the integrity of Jennifer, Tracy and Mark". Have you ever had a chance to participate in a long one on one with any of them?

They are so far removed from most of us normal residents that I only know what any Morse looks like from photos. I wouldn't recognize them if I passed on the street. I'm hoping that you have a better base for your opinion than the other 99% of us do.

Responding to #1 original thread. - Great thread, good hypothesis, logic, and details. Your credentials and experience make your hypothesis very strong. I would add that golf is decreasing in popularity with younger people and retirees. Shopping Centers are decreasing in value. Shopping Malls are defaulting nationally. Carl Ichan is shorting them. The market is up, but CEOs and other inside traders are shorting their Company stocks. TV Land seems to have been created for Baby-boomers that demographically are in decline. The Developers see this "writing on the wall" and may feel they NEED to act soon. Also, the CV adds risk to all society and could speed up their need to act. Wealthy older people are more risk-averse. The Developers could be just appealing to younger customers. Or "cashing out" as you sa, could be their best move.

Another thought line.

What is the difference in luxury apartments (recently added to TV) and the mass of assisted living units added to and around TV?

As the boomer generation begins to age (now the early boomers in mid 70's) the consideration of luxury apartment/condo living is becoming a way of avoiding the necessary up keep of a free standing home or villa for many.

Also consider...if what you deplict is the developer's plan....why haven't they begun with other large areas like the compound, the stables north of the polo grounds, etc?

If as you say, the building of repeatable & dependable capital flow is their plan, why invest south of SR44, where the profitable return is many years away?

However, there are always negative thinkers that figure the glass is half empty.

Quote:

Originally Posted by npwalters (Post 1822613)

They are so far removed from most of us normal residents that I only know what any Morse looks like from photos. I wouldn't recognize them if I passed on the street. I'm hoping that you have a better base for your opinion than the other 99% of us do.

Hang around Brownwood...............you can see them all you want.
They actually walk the square like normal people. :faint:

Jennifer has stopped a number of times for a conversation.

:ho:

Quote:

Originally Posted by maryl (Post 1822394)

I agree and I am so glad I am out of there I seen this happening now the Villages is no longer the place to live
And the siblings that are ruining it I wish them bad luck for destroying there parents dream

A lot of truth there!

Quote:

Originally Posted by Dilligas (Post 1822667)

Developer is a smart group of people constantly looking for new ways to make money but in the short and long run.

Apparently they think they can do so by adding homes south of here as well as apartments.

Just wondering if our experience will start to deteriorate down the road.

Quote:

Originally Posted by Dilligas (Post 1822667)

However, there are always negative thinkers that figure the glass is half empty.

And that profit is a four letter word.

No comment. I just want to live my life and enjoy it.

(But congratulations to those of you who think TV has been ruined and got out in just in time! :))

Quote:

Originally Posted by Polar Bear (Post 1822695)

No comment. I just want to live my life and enjoy it.

(But congratulations to those of you who think TV has been ruined and got out in just in time! :))

Or should get out while the getting is good.