SAN DIEGO—Investors are recognizing manufactured-housing communities as having the most stable cash flow of any multi-housing class, often with more-favorable returns than traditional multifamily, HFF's director Zach Koucos tells GlobeSt.com. As we reported recently, since April, Koucos and managing director Tim Wright have arranged $65.7 million in combined financing for 11 manufactured-home communities totaling 1,605 home sites located in California and Oregon. We spoke exclusively with Koucos about this asset class and what its current appeal is for investors.
GlobeSt.com: Is the manufactured-housing market gaining prevalence as an investment target?
Koucos: Yes, we're seeing an ever-increasing interest in MHCs as investors are recognizing that they arguably provide the most stable cash flow of any multi-housing asset class. The returns on MHCs also can be more favorable when compared to conventional multi-housing in many markets.
GlobeSt.com: What do the manufactured-housing communities for which HFF has arranged financing have in common?
Koucos: Strong occupancy and cash-flow history, experienced sponsorship and management, attractive community amenities and consistent upkeep and maintenance.
GlobeSt.com: What are investors looking for in MHCs?
Koucos: Strong locations, well-maintained communities and demand due to affordability for residents when compared to the surrounding apartment and single-family housing market. Investors naturally want to see a strong potential for rent growth.
GlobeSt.com: What else should our readers know about manufactured housing?
Koucos: Supply of MHCs in many markets, particularly near the coasts, is insufficient due to barriers to entry such as the cost of land and zoning restrictions. As the highest and best use for an existing manufactured-home community becomes a higher-density apartment complex, shopping center, industrial park, etc., rentable units are taken off the market. This has created substantial demand, on the part of both residents and investors.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
