Major Investors Pile Into Mobile Homes As Housing Prices Skyrocket
One of the nation's largest private equity companies is expanding its bet on mobile homes, underscoring the rising appetite of investors for one of America's last bastions of affordable housing.
Blackstone Group LP paid $55.1 million to buy four manufactured housing parks in greater Phoenix, its second such acquisition in less than a year. The New York City-based financial giant is tapping heightened demand driven by the rising cost of housing nationwide, which is pushing more people than ever into a limited supply of mobile homes that provide a lower-cost alternative to single-family homes and apartments.
The recent purchase of the mobile home parks totaling 838 home sites from Denver-based fund investor Caddis Capital Investments LLC is almost $65,800 per site, 25.7% more than the median price per site in sales tracked by CoStar as of the first quarter of 2019.
The deal comes as sales of mobile home parks reached a record high last year at almost $3.2 billion, according to CoStar Analytics. But sales began increasing after the Great Recession, rising steadily from $722 million in 2010 to $2 billion in 2017. Median mobile home park sales prices reached $55,200 per home site in the first quarter of 2019, also the highest on record.
Rents posted a healthy gain of just under 4% and occupancy increased across the country to almost 93% in 2018, the seventh straight year of occupancy growth, according to a manufactured housing market report this year by commercial property financing provider NorthMarq.
Mobile homes, referred to legally as manufactured homes, are large trailers or transportable prefabricated structures with wheeled chassis built in factories that are hauled to a home site for use as permanent living accommodations. They're usually on rented home sites in parks or communities that can include shared amenities s
uch as a pool and clubhouse and often cost substantially less to rent or own than other forms of housing.