Real estate investors have turned to single-family rental homes, warehouses and even movie studios while the pandemic makes it harder to put capital to work in more-traditional types of commercial property.
Mobile home parks are also getting a look.
More than $800 million worth of the parks changed hands in the second quarter, up 23% from a year earlier, according to a report by commercial real estate firm JLL. Total commercial-property purchases declined 68% to roughly $45 billion in the same period.
Institutional investors accounted for 28% of mobile home park purchases, the highest share since JLL started tracking the asset in 2010. Valuations -- based on the price investors pay for sites that are leased to mobile-home owners -- increased 26% from the second quarter of 2019.
The parks are attracting new interest while Covid-19 hammers prospects for hotels, shopping malls and other commercial-property types. Institutions are also drawn to opportunity to consolidate and upgrade assets owned by smaller investors, said Scott Belsky, who leads the manufactured-housing practice in JLL’s valuation group.
Residents at the parks typically own their homes but lease the ground they’re on. Those rents help generate stable returns for investors, according to Belsky.
This article was provided by Bloomberg News.