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.