There are statements made or reported by the mainstream or specialty media, such as the one that follows, that routinely includes a mix of interesting, wrong, and problematic elements.
Writing for Globe Street, a commercial real estate investor focused publication, Kelsi Maree Borland says some things that would bring a mixture of agreement plus hard-to-swallow reaction by thousands of manufactured home industry professionals. Ditto that type of potential feedback from long-time investors in the manufactured home communities sector.
For example, Borland writes, “Once considered a high-risk investment, investors are seeing more and more stability and NOI growth in mobile homes.” Anyone who’s been in manufactured home communities for several decades know how stable that sector has been.
For example, Equity LifeStyle Properties (ELS) was formed in December 1992, and has steadily grown. Even during the so-called Great Recession, manufactured home communities – what Borland calls “mobile home parks1,” consistently performed better than most any other real estate sector.
Borland cites Hunter Thompson from Cash Flow Connections as his source for the article published August 27, 2018.
“The investor owns the land lot and tenants own their home,” said Borland, who then quotes Thompson. “This has many benefits including the stability of the tenant base and pride of ownership in the assets. Furthermore, the homes are very costly to move, usually $5,000, and are typically only worth $5,000-$20,000. The mathematics results in the tenants staying for much longer than other asset classes,” says Thompson.”
While there are older communities that such a description might fit, there are thousands of industry professionals who would nuance or reject that kind of description as applying to their community(ies).
“While Thompson says that demand for mobile home parks is directly correlated with the economy and grows as demand for affordable housing grows, limited development of new parks has also greatly helped to fuel the stability of these assets,” writes Borland.
The Globe Street writer then quotes Thompson again, “Municipalities and government agencies all over the US have banned the development of MHPs, creating a significant supply/demand disequilibrium which investors can take advantage of,” he says.
There’s a mix of useful and problematic statements made in his GlobeSt report. This is nothing new for MHVille, which certainly needs all the positive or accurate reporting it can get. Certainly, “competition is heating up,” and that perhaps is the most accurate part of the story, from the vantage point of MHVille.
This is yet another example of why the industry needs positive engagement of the media, as Frank Rolfe has said on stage, and in writing.
With a more level playing field in:
- enhanced preemption,
- coupled with the correct type of education and promotion could lead the industry to new glory days.
See the related reports, linked below. “That’s news through the lens of manufactured homes, and factory-built housing.” © ## (News, analysis, and commentary.)
Footnote 1: in most cases, the proper term for a land-lease community like the ones being discussed would be manufactured home community, not mobile home park. A possible caveat would be if the homes and property are filled with true pre-HUD Code mobile homes.
(Third party images and content are provided under fair use guidelines.)
1) To sign up in seconds for our MH Industry leading emailed news updates, click here.
2) To provide a News Tips and/or Commentary, click the link to the left. Please note if comments are on-or-off the record, thank you.