Low-Cost Housing Demand Boosts Mobile-Home Park Operators
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Strong demand for low-cost housing is proving a boon for one of the real-estate industry’s least glamorous sectors: companies that operate mobile-home parks. Although few new mobile-home communities are being built, the larger companies in the sector are actively buying up the smaller players, reducing competition. At the same time, rising demand from families seeking space in the parks has allowed mobile-home landlords to raise rents, producing strong growth.
“I’ve been at this for about 10 years and I would say the demand right now for manufactured housing communities is at an all-time high,” said Jonathon McClellan, senior director of the national manufactured home communities group at Marcus & Millichap. Mobile homes are also called manufactured homes because they are built in a factory and shipped to a community.
The three real-estate investment trusts in the sector— Sun Communities Inc., Equity LifeStyle Properties Inc. and UMH Properties Inc. —all are seeing strong gains in the number of properties owned and in revenue.
Sun Communities, based in Southfield, Mich., for example, has nearly doubled its holdings since 2011 and now operates 249 communities with about 90,000 individual home sites compared with 136 communities with about 45,000 home sites.