Trailer park hous­ing fu­els REITs

Northwest Arkansas Democrat-Gazette - - ONLINE EXTRA -

Re­tirees and oth­ers look­ing for af­ford­able hous­ing are giv­ing the trailer park life­style a fresh look th­ese days.

In­vestors have picked up on this trend, driv­ing shares in Sun Com­mu­ni­ties and Eq­uity Life­Style Prop­er­ties sharply higher this year. They are two of the big­gest own­ers and op­er­a­tors of man­u­fac­tured home com­mu­ni­ties. The real es­tate in­vest­ment trusts, or REITs, also own lots that host recre­ational ve­hi­cles.

As home prices and rents have risen sharply, re­tirees and oth­ers seek­ing more af­ford­able hous­ing have helped drive up de­mand for man­u­fac­tured homes, says Ryan Burke, an an­a­lyst at Green Street Ad­vi­sors.

The prop­erty type rep­re­sents about 7 per­cent of the na­tion’s hous­ing stock. Even so, man­u­fac­tured homes REITs have a to­tal re­turn of 18 per­cent so far this year, be­hind only in­fra­struc­ture and data cen­ter REITs.

“The de­mand out­look con­tin­ues to look good and, per­haps most im­por­tantly, it isn’t be­ing met by com­men­su­rate lev­els of new de­vel­op­ment or new sup­ply,” Burke says. “And that’s some­thing we don’t see in any other real es­tate type.”

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