In the first quarter of 2018, the manufactured housing, self-storage and industrial sectors were the stars of the REIT show, as real estate investment firm PGIM Real Estate noted in a market review.
NREI: What’s behind the strong performance of the manufactured housing sector, and what do you think will happen with manufactured housing REITs going forward?
Marc Halle: It’s a really great sector and has been in the public markets for 20-plus years. Over the past few years, it’s really become more institutionally acceptable. These are just cash cows that tend to be recession-resilient; they’ve got bond-like income with good growth. It’s not been institutionally acceptable for many years because of the lack of a “sexy” factor. You didn’t want to put a manufactured home community on the cover of your investor report.
It’s difficult to build manufactured home communities, it’s difficult to create competition, it’s one of the biggest NIMBY sectors, and it’s an industry with very limited supply and good demand. These are no longer the mobile home parks of a TV sitcom. These are professionally run communities where the landlords develop the land, they put in the utilities, the tenants bring the homes in and they pay rent, and they pay rent on time with very low unpaid receivables….