Manufactured Housing Communities Top 2015 REIT Sector Performance

As reported by UrbanLand, aging baby boomers and strong demand for inexpensive housing have helped boost the small manufactured housing real estate investment trust (REIT) sector. Here are a few key takeaways from that article:

  • Total year-to-date return of 13.13 percent far exceeds the FTSE NAREIT All Equity REIT average of –1.07 percent.
  • The market is supply-constrained and fragmented. It can be difficult to get land zoned for new communities because of the public’s generally poor perception of manufactured housing.
  • At the same time, rising rents and home prices are causing more people to consider manufactured housing rather than site-built housing.

We (Park Street Partners) expect a couple existing mobile home park firms to take their portfolio public over the next decade. These firms will have access to cheap capital (most REIT dividends are in the 3-5% range) and we will need to expand their portfolios to satisfy Wall Street's insatiable need for growth. We see this slow, but steady consolidation trend continuing for the foreseeable future.