Part II:\u00a0 The Allen Report on Manufactured Home Community Portfolio Operators: Then, Now and Tomorrow<\/p>\n
Editor\u2019s Note:\u00a0 This is the second of a four-part series of the exclusive interview George F. Allen gave MHMSM.com Industry in Focus Reporter Matthew J. Silver.<\/p>\n
MHMSM:\u00a0 What is the difference between this year’s Allen Report and last year’s?<\/p>\n
GFA:\u00a0 A lot. It may have a lot to do with the fact I’m retiring and this may be the last one ever published. I may sell it, that remains to be seen, but I put everything in this one except the kitchen sink.\u00a0 So this is the standard for years going forward. I’ve already marked mine up with things I should have put in here, but I didn’t think of at the time. But size wise, content wise, this year’s is much larger, and that’s because I wanted to set a high standard for going forward. This is the 22nd year.\u00a0 The first year was a single page showing the 25 largest known mobile home park* owners based on Roulac Real Estate Consulting Group of Deloitte Haskins and Sells.\u00a0 It shows spaces owned and parks owned. After I started doing my consulting work, I was coming up with my own list, and they stopped publishing theirs.\u00a0 I have made it part of my business since.\u00a0 Nine of the firms on that list are still in business today, and they are in my Allen Report.<\/p>\n
MHMSM:\u00a0 Besides Green Courte Partners, have there been any other changes in the data or statistics since the Allen Report was published?<\/p>\n
GFA:\u00a0 Green Courte bought several other properties right after the deadline, which would move them up the chart for next year, assuming someone takes this over.\u00a0 A couple of years ago, they bought out a REIT (real estate investment trust) named Landlease and they asked to use that name because they like the way Landlease plays better than Green Courte Partners.\u00a0 I can’t tell you any more than that without getting on thin ice.\u00a0 Subsequent to this last Allen Report, they bought six communities with 1,857 homesites, which would have moved them from number nine to number seven in terms of the largest landlease community owner.\u00a0 The company they bought them from did not respond to my request for information, and I suspect it’s because they did not want to be listed lower than in the past, so they preferred to not be listed at all.\u00a0 There is one error in the Report because the company, J & H Asset PM, provided me with incorrect figures that put them at number 70 on the list of the largest community owners, when they should have been number 14.<\/p>\n
MHMSM:\u00a0 Why do you suppose you received only 137 responses out of 500 MHC portfolio operators you contact annually?<\/p>\n
GFA:\u00a0 I am sure there are many reasons why.\u00a0 Some of them run like this.\u00a0 First off, it is not a glamour investment.\u00a0 If you go to a cocktail party and say you own part of the Hilton Hotel chain, it’s very different from saying you own part of five trailer parks.\u00a0 It’s a very lucrative business, and some people don’t want you to know where they make their money.\u00a0 Secondly, in my opinion, this asset class is a very secretive group.\u00a0 Why tell the world this is a lucrative investment when that would only bring in more players you would have to contend with.\u00a0 In addition, on my deadline for responding, I’m lucky if I have 50 responses to my questionnaire. I get on the phone and start calling and that’s how I got information for the other 87 questionnaires.\u00a0 Why don’t they send them in?\u00a0 Some of them say their secretary lost it.\u00a0 But some of them know that this is the only time all year we will talk, and they want to know what’s going on in the rest of the country.\u00a0 Some of them don’t want to come around to the front, because they know I will come around the back, and they will get a little information out of me.<\/p>\n
MHMSM:\u00a0 What are the new features in this year’s Report?<\/p>\n
GFA:\u00a0 On page nine, I have listed eight reasons to own communities.\u00a0 That’s not been in there before. It’s like an insider’s list.<\/p>\n
\u00b7\u00a0\u00a0\u00a0 On page ten, I show Randy Rowe’s five point plan to save the manufacturing home industry.
\n\u00b7\u00a0\u00a0\u00a0 On page 17, I list my acknowledgments, thanking people for their donations in putting out this report.\u00a0 I had never asked people for support before, but this year I did.\u00a0 On the list of the 137 responders, if there’s a dollar sign after their names, it shows they contributed to the report.
\n\u00b7\u00a0\u00a0\u00a0 On page 23, I’ve listed the Five Action Areas agreed upon by the National State of the Asset Class (NSAC) in 2008 that continues to guide owners of mobile home park owners nationwide.\u00a0 These are the five areas we want to concentrate on to make our business better.
\n\u00b7\u00a0\u00a0\u00a0 All of the appendices from page 25 on are new features I’ve never published before.<\/p>\n
In all the years past, I’ve put a price tag of $250. If someone called and asked about buying one, I would say it’s $250, or, you can have one for free if you subscribe to my newsletter that costs $134.95 a year.\u00a0 Knowing this year’s was going to include more information, I put a hefty price tag on it of $450.\u00a0 Have I sold any for $450?\u00a0 No.\u00a0 Do I expect to sell any for $450?\u00a0 No.\u00a0 I am testing the market.\u00a0 If people call and want to buy it, I tell them I will sell it to them for $250 and I will throw in my yearly newsletter for free.\u00a0 In other words, I have upped the ante from $134.95 last year to $250 this year.\u00a0 In part, I am doing it for the people who will come after me, and so far it’s working like a charm. It’s been out only a month or two, and I’m getting one or two calls a day.<\/p>\n
MHMSM:\u00a0 Your Report is important to certain aspects of the industry, notably when it comes to issues such as financing and valuation.\u00a0 Where might MHC owners turn if your Report is no longer available after your retirement?<\/p>\n
GFA:\u00a0 It is not my intent to see it not continue. I’m entertaining offers from two not-for-profits and one business right now, who want to buy it.\u00a0 I would probably stay on as a consultant; I don’t want to walk away completely.\u00a0 I will probably ease away because I want the Report to continue.\u00a0 Currently there is no one else out there turning out credible researched information for the asset class.<\/p>\n
MHMSM:\u00a0 Why do you suppose no one else has done it? Did you realize there was a need and you filled it?<\/p>\n
GFA:\u00a0 Before I started, in 1978 I was managing apartments for a firm nearby, and after two years they called me into the office and told me they were taking away my apartments, and they had four trailer parks that were in the red, and they wanted me to turn them around and put them in the black.\u00a0 I walked out of that office stunned and angry; I did not want to deal with what I saw as trailer trash.\u00a0 I had returned recently from Vietnam, had two small children, and knew I needed to adjust my attitude or get a new job.\u00a0 I eventually realized there were no mobile home park gurus out there, no books on the subject, and if I could transfer my knowledge of apartment management to mobile home parks, there were opportunities for me as an investor and as a consultant.\u00a0 And that’s basically what happened.\u00a0 Two years later, the properties sold; I managed them under the new owners for a while, then my wife and I decided to start our own business.\u00a0 We managed all kinds of properties, focused on mobile home parks, and two years later bought our own park.\u00a0 We sold it, made a very significant profit, at which point I could have retired \u2013 but I chose to start writing and consulting, and in 1988 wrote my first book on the business, and never looked back.\u00a0 It’s been a very comfortable business.\u00a0 Now it’s time to set that up in other people’s hands and take a different route.<\/p>\n
*All terms used by GFA have been retained in this blog post.<\/p>\n
Next week:\u00a0 Part III:\u00a0 The Future of Manufactured Housing Communities (MHCs)<\/p>\n
Click here to read Part I: Are Manufactured Housing Communities (MHCs) a Good Investment? http:\/\/www.mhmsm.com\/blogs\/industryvoices\/george-allen-sounds-off-in-exclusive-interview-on-key-mhc-and-industry-issues\/<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Part II:\u00a0 The Allen Report on Manufactured Home Community Portfolio Operators: Then, Now and Tomorrow Editor\u2019s Note:\u00a0 This is the second of a four-part series …<\/p>\n