Blackstone Reportedly in Talks to Buy Manufactured Home Portfolio
Other institutional investors are also making a play for this asset class.
Blackstone Group is in exclusive talks to acquire about 40 parks from Summit Communities for roughly $550 million through its REIT, Blackstone Real Estate Income Trust, sources have told Bloomberg.
Once acquired, BREIT will invest in upgrades, including building shared facilities such as swimming pools, a source told Bloomberg.
Manufactured homes have become a valued asset class in the commercial real estate sector, one of the few categories that have not been bowed by the pandemic. Indeed, in a recent report JLL predicted that institutional investment activity in the manufactured housing sector will increase as the sector’s recessionary resilient performance outshines the majority of commercial real estate sectors.
Another example of the activity in this space comes from another Bloomberg report that private equity firm TPG is exploring the sale of Strive Communities, an operator of mobile-home parks that could fetch $750 million or more, sources told the publication.
Unlike most other commercial real estate sectors, valuations for manufactured housing communities continue to trend upward, according to JLL. The second quarter price per pad averaged $50,792, with favorable growth trends, up 6.6% from the first quarter of 2020 and 26% year-over-year, it said.
Second quarter 2020 transaction volume totaled $821 million, JLL also reports, marking a 12% increase over the fourth-quarter 2019 total and a 23% increase over the first-quarter 2020 volume. “This is a stark difference in investment trends for all commercial real estate, closing the second quarter of 2020 at $44.6 billion, a year-over-year decrease of 68%, showcasing investor confidence in the manufactured housing sector,” JLL says.