Hot commodity: Investors bet on mobile home parks

Sales volume increased 23% in the second quarter, year-over-year

TRD NATIONAL TRD WEEKEND EDITION /
Sep.September 05, 2020 12:00 PM
(iStock)

(iStock)

As returns fade and uncertainty reigns in traditional commercial real estate sectors, investors are moving money into mobile home parks.

More than $800 million worth of mobile home parks traded during the second quarter, according to Bloomberg. That’s 23 percent more than the volume sold in the second quarter of 2019.

Meanwhile, total commercial trades declined 68 percent year-over-year in the second quarter to $45 billion. During April — so far the worst month economically of the coronavirus pandemic — deal volume fell 71 percent year-over-year, or by $11 billion. Not a single commercial property type saw an increase in sales volume.

Investors are willing to pay more for property leased to mobile home owners than they were last year. Valuations of those properties were up 26 percent, year-over-year, in the second quarter.

Institutional investors accounted for 28 percent of the deals, according to JLL. That’s the largest share since the firm started tracking mobile home park deals a decade ago.

JLL’s Scott Belsky said that mobile home parks generate stable returns for investors because residents usually own their own homes and rent the ground they’re on.

Single-family rentals and the companies that invest in them are also attracting a ton of capital.

JPMorgan Chase more than doubled its investment in American Homes 4 Rent to $625 million in May.

Koch Industries made a $200 million preferred-equity investment in Amherst Holdings’ single-family rental business. And Invitation Homes plans to double its portfolio of single-family rentals. [Bloomberg] — Dennis Lynch 


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