Previously we’ve shared manufactured home statistics and results from a manufactured homeowner survey, as well as numbers on manufactured housing production, top manufacturers and top 10 retail markets.
Today we provide a snapshot of national site rents and occupancy rates for manufactured home communities. The JLT Manufactured Home Community Rent and Occupancy reports, published by Datacomp, offer insight that manufactured housing professionals can use to make informed business decisions.
Photo courtesy of Zeman Homes.
Manufactured Home Community Site Rent and Occupancy Rates
(Information from Datacomp and JLT Market Reports based on data between May 2018 and May 2019)
Average Lot Rent for Manufactured Home Communities
Manufactured home community site rent, also called lot rent, was $535 per month on a national average. Site rent in all-ages communities was $514 and 55+ communities had a national average site rent of $579. Site rent has increased year-over-year by 3.9% on average, with all-ages communities’ average increase in site rent coming in 0.1% lower than the 55+ and overall averages.
Average Occupancy Rate for Manufactured Home Communities
The average occupancy rate for manufactured home communities was 93%, with all-ages communities coming in at 91% and 55+ communities registering 96% on average. The national average occupancy rate went up 1% May 2018 to May 2019. All-ages communities experienced an average occupancy rate increase of 1.2% and 55+ communities had an average occupancy increase of 0.5%.
Markets with the Highest Average Site Rent
All Ages
Market
Rent
Orange County, CA
$1,383
Santa Clara County, CA
$1,145
Los Angeles County, CA
$946
55+
Market
Rent
Santa Cruz County, CA
$1,590
Orange County, CA
$1,018
Santa Clara County, CA
$880
Markets with the Lowest Average Site Rent
All Ages
Market
Rent
Highlands County, FL
$172
Albany, GA (MSA)
$223
Hendry/Okeechobee Counties, FL
$224
55+
Market
Rent
Greenville, SC (MSA)
$223
Miami-Dade County, FL
$225
Albany, GA (MSA)
$234
Markets with the Highest Average Occupancy Rate
All Ages
Market
Occupancy Rate
Santa Clara County, CA
100% (0.2% increase)
Miami-Dade County, FL
100% (0.4% increase)
Northern Colorado
100% (0.2% increase)
55+
Market
Occupancy Rate
Orange County, CA
100% (0.2% increase)
Santa Barbara County, CA
100% (0.1% decrease)
Alameda County, CA
100% (0.1% increase)
Markets with the Lowest Average Occupancy Rates
All Ages
Market
Occupancy Rate
Genesee County, MI
63% (3.2% increase)
Leon County, FL
68% (0.3% increase)
Lee County, FL
71% (0.2% decrease)
55+
Market
Occupancy Rate
Monroe County, MI
61% (38.5% increase)
Gettysburg, PA (MSA)
72% (4.9% decrease)
Bay/Midland/Saginaw, MI
75% (0.2% increase)
Markets with the Greatest Average Increase in Occupancy
U.S. Rep. Trey Hollingsworth, from Indiana, talks to manufactured housing professionals in attendance at the 28th Networking Roundtable in Indianapolis Monday morning.
Lawmaker Applauds Manufactured Housing Efforts, Pushes for Reform
Congressman Trey Hollingsworth, who represents Indiana’s 9th District in Washington, gave an impassioned address Monday morning to manufactured housing professionals at the 28th Networking Roundtable in Indianapolis.
“This truly is a crisis across the country,” Hollingsworth said of the lack of affordable housing. “People talk about housing prices on the coast, but it’s everywhere. It’s right here in our cities and towns across the state of Indiana.”
Hollingsworth points to the steady decline in volume of first-time homebuyers, which has an adverse impact on the overall economy. In addition, existing homeowners often are unable to move to hot job markets because of the high cost of housing.
“You can’t sell an $80,000 home and move across a county or state line and buy a home in a market where you have to spend more than $200,000,” he said. “You should be able to go where you want to go, holding on to that portion of the American Dream.”
“You all have a solution that few others do. You are and can be a real resource for affordable home buyers.”
Housing Reform in Washington, D.C.
The Congressman noted that jobless claims are at historic lows, which has he and his colleagues focusing on workforce development. Businesses cannot maintain a period of expansion if the labor market dries up.
“No matter where I go the number one, and by far the biggest concern is the lack of qualified workers,” Hollingsworth said. He said the U.S. has impeded workforce growth through the over-emphasis on young people attending college rather than a balanced approached that provides trade school certifications.
Hollingsworth said another area of focus that will help with housing availability is lowering the regulatory costs associated with home transactions.
The average cost of regulatory mandates for a home purchase has more than doubled in the last decade to more than $7,000 of the home price.
When a stack of papers with small print arrives at closing, he said, the homebuyer learns nothing more about the purchase.
“They say ‘I don’t want to read this,’ and they sign,” Hollingsworth said.
Added regulatory cost within a home loan means lenders need to write bigger loans to make the same money, which adds to the affordability crisis.
“This is what’s really holding back our development,” he said.
Dodd-Frank and other regulatory reform have created valuable consumer protections. However, some regulatory language has been detrimental while other language adds cost but no value.
“It’s been 10 years and we need to go back in and determine what we did right, what we did wrong and what we added in that made no difference,” Hollingworth said.
In the end, the Congressman lauded manufactured housing professionals for getting a lot of the heavy lifting out of the way.
“You all have a solution that few others do,” he told the audience of more than 200 in Indianapolis. “You are and can be a real resource for affordable home buyers.”
Datacomp today announced the publication of its September 2019 manufactured home community rent and occupancy reports for Oklahoma, Texas and Northern California.
JLT Market Reports provide detailed research and information on communities in 178 major housing markets throughout the United States. These include the latest rent trends and statistics, California rent control increases and “next increase”, marketing programs and a variety of other useful management insights.
Datacomp publishes the JLT Market Reports and is the nation’s #1 provider of market data for the manufactured housing industry. JLT Market Reports are recognized as the industry standard for manufactured home community market analysis.
September 2019 manufactured housing market data published in JLT Market Reports for Oklahoma, Texas and Northern California include information on 1,048 “All ages” and “55+” manufactured home communities.
Altogether, the reports on the three states’ manufactured home communities include data representations for 217,805 homesites.
“Community site rent and occupancy numbers in our September JLT Market Reports show strong and sustainable growth across the board in all three states,” Datacomp Co-President and Chief Business Development Officer Darren Krolewski said. “There was a decrease in rents among 55+ communities in one Northern California market, and occupancy dipped in only one market among all-ages communities in Texas.”
More About JLT Market Reports
Each JLT manufactured home community rent and occupancy from Datacomp has detailed information about investment grade communities in the major markets. The detailed information includes:
Number of homesites
Occupancy rates
Average community rents, and increases
Rent control increase, and “next increase” for California
Community amenities
Vacant lots
Repossessed and inventory homes, and much more
JLT Market Reports also include management insights that rank communities by number of homesites, occupancy rates and highest to lowest rents. Established reports show trends in each market with a comparison of September 2019 rents and occupancy rates to September 2018, as well as a historical recap of rents and occupancy from 1996 to present date in most markets.
Each fully updated report for mobile home communities is a comprehensive look at investment grade properties within a market, enabling owners and managers, lenders, appraisers, brokers and other organizations to effectively benchmark those communities and make informed decisions.
Sleepy Hollow's clubhouse, designed by Charles Dilbeck, was fully restored inside and out.
What is your “me”?
That’s a question this Lifestylist was asked at a recent design summit, which made me rethink our industry and culture. How we approach our businesses, especially how we build and develop land-lease communities, is changing at a rapid pace. Are we keeping up with our buyers’ expectations?
“Adapt. Evolve. Or Become Extinct” is a great quote I heard years ago, which seems very relevant today.
Create an Experience, Sell a Lifestyle
As I write this, I am contacted by a friend who wants a second home in Florida and is open to a modular home, but has no interest in living in a “trailer park”. Last year, there were over 700,000 new millennial households created. Are we an industry, or lifestyle, that they are considering — or is their perception of our industry too negative?
Signature Kitchen Suite, the new luxury brand of LG Electronics, has done a brilliant job of setting itself apart from the competition by branding itself as “True To Food”. Simple, but immediately lets you know that the company is serious about the culinary experience.
Design expert and speaker LuAnn Nigara explained that the company has a “You, not a Business” and that the message is very personal. Can you say the same about your brand and your community?
Buyers today are more interested in experiences than things. They don’t ask for technology in their homes — they expect to have technology in their homes because it always has been part of their lives. They are conditioned for immediate gratification. Pretty much anything they want they can order on Amazon and it will be there tomorrow. Even the definition of luxury has changed — they want to experience luxury instead of owning it.
So, as an industry, are we selling a product or offering an experience? We have an incredible opportunity in front of us for growth. Here are five ways to build in the experience consumers want from your communities.
Consumer Experience in Five Points
The clubhouse community room at Sleepy Hallow.
Find Your “Me”: What’s Your Story?
Today’s new buyers are storytellers — they love to share their experiences on social media. We all are looking for what makes us “me”, and how that makes us interesting and has people wanting to learn more.
One of my favorite examples is Sleepy Hollow, a YES! Community in Fort Worth, Texas. It has a wonderful location just minutes from downtown, centuries-old trees, and a huge old estate home used as a clubhouse. The owners decided to do some digging and found out the history. They were delighted that famous architect Charles Dilbeck built the home. His signature architecture and the details he is known for were alive and well, just covered over or underused. There were rumors that the house was haunted, too. And instead of running from that myth, they embraced it, made renovations and updated the community.
The clubhouse became more of a shared space residents could use and be proud of. The original art was restored, and every Halloween they have a spooky party that residents and neighbors alike beg to get invited to! Potential residents not only get leasing information and costs when they visit, but are treated to the rich history of the community they will be calling home.
Eagle Creek’s dog park is the ideal run for resident pets.
Dog Parks
Eagle Creek installed a leash tree in its dog park.
Animal lovers take the welfare of their pets as seriously as they do their own, and they love to have their four-legged family members make friends in their new communities. A fenced area with some benches, relief stations, and access to water are inexpensive ways to add value and community in underutilized spaces. It’s also a great way to encourage residents not to let their animals run free through your community.
What’s in a Name? Everything!
Rolling Hills in Battle Creek, Mich., changed its name to The Community of Rolling Hills, and it truly is a community — beautiful entryway, clubhouse and pool. It is selling the lifestyle and community, not the fact that the homes were brought there on wheels.
Community Gardens/Garden Clubs
We all know that first impressions are everything. Why not let your residents with a green thumb help with the landscaping and gardens at your community? The Community of Rolling Hills also has a community garden where residents can plant vegetables and share them. It’s a treat to go into the clubhouse and be gifted with fresh-picked tomatoes and cucumbers.
Technology and Social Media
Our kids are more tech-savvy than most of us will ever be. Why not reward them for their knowledge and invite them to help others in the community set up social media accounts and answer their technology questions? Encouraging them to be a part of the community, instead of looking down on them for driving too fast or leaving their bikes out front, can be a great way to help them take pride in where they live.
Is this a mindset worth embracing in your community? Award-winning communities think so, and continue to look for ways to keep their residents connected.
Interesting Facts About Manufactured Housing Production
The manufactured housing industry produced 96,540 homes in 2018. That production comes from 34 corporations running 129 facilities throughout the United States.
Manufactured housing production increased by more than 49% from 2014 through 2018, according to the Manufactured Housing Institute.
Who Are The Top 10 Manufacturers in the Industry?
Manufacturer Market Share
2018 Market Leaders by Share
Clayton Homes Inc.
50.15%
Skyline Champion Corp.
15.32%
Cavco Industries
13.18%
American Home Star
2.51%
Legacy Homes
2.20%
Adventure Homes
1.85%
Live Oak Homes
1.81%
Elliot MH MFG
1.66%
Jacobson Mobile Home
1.15%
Kabco
1.11%
Top 10 Manufactured Home Retail Markets
Market Area Sales Activity Year-over-Year
2018 Top 10 Markets Sales Activity
Houston
12.30%
Detroit
-19.72%
Dallas-Fort Worth
-4.55
Austin
0.22%
San Antonio
-9.03%
Los Angeles
41.13%
Birmingham, Ala.
6.81%
Beaumonte-Port Arthur, Texas
65.02%
Phoenix
-4.32%
Jacksonville, Fla.
24.28
The Big Three Manufacturers
Clayton, Skyline Champion and Cavco — often referred to in the industry as the Big 3 — possess a combined market share of nearly 80%.
See the Full Manufactured Housing Industry Trends & Statistics Infographic
Rent control for manufactured home communities (MHCs) can be substantially different than it is for apartments and other forms of housing. In California, we have 40 years of experience with manufactured home community-specific rent control.
Although rent control for other types of housing is strictly limited by California law, the state preemption has never applied to MHCs. Without those limits, every California city and county has been free for decades to enact its own form of MHC rent control, or not. This has resulted in dozens of variations and combinations of a few key tools that are used by local governments to set MHC space rents. What has resulted can provide forewarning to other parts of the country, and can be used to navigate rent control proposals that may be impending in your locale.
This article will be the first in a series that will explain the most common elements of manufactured home community rent control systems. If rent control has not yet come but is being debated in your area, understanding the possible components and their operation can help you learn the most important issues to address when advocating for yourself and other MHC owners. If you are considering whether to invest in a rent-controlled community, knowing what is and what is not possible when trying to increase rents will give you your best evaluation of its potential value. And if you already own a rent-controlled MHC, you may learn that your rents could be higher.
The Details on Vacancy Control
One of the most onerous elements in MHC rent control is vacancy control. With full vacancy control, the rent for a space cannot be increased when a resident sells their home to a new resident — the rent for all spaces remains fixed except for annual, uniform adjustments. Vacancy control is probably the worst potential component of rent control, effectively preventing any space rent from ever catching up to the market. Over time, it can result in community rents at half of market value or less.
Vacancy control also creates a dangerous entitlement that, once granted to residents, becomes nearly impossible to take away. Because of the guaranteed low rent and restrictions on future increases for the space, the selling homeowner can command a premium for their home, effectively capitalizing the future rent savings for the new homeowner into the price of the home.
Vacancy Control Transfers Property Value to Homeowner
In California, a 40-year-old home in poor condition can sell for $200,000 or more because the rent for the space is extremely low. Yet, the value of the MHC to its owner is drastically suppressed because of the below-market restrictions on rent.
Vacancy control provisions effectively transfer the value of the manufactured home community from the landowner to the homeowner. And once the transfer begins, homeowners will complain that any reduction in rent control will reduce their “equity” in the home they (over)paid for.
Vacancy control can take forms less than “total”. In some jurisdictions with “partial” vacancy control, rent can be raised a small fixed percentage upon a vacancy, usually 10 percent. This can make a significant difference over time. Others will allow the rent to be raised upon a vacancy to a fixed reference point, such as the highest comparable space in the community. Those systems leave more room for strategizing, but also can drag on rents.
Vacancy control cannot be rationalized by the typical justification given for MHC-specific rent control. The “captive audience unable to move their home” explanation usually given for MHC-specific rent control does not explain why a community owner should not be permitted to increase the space’s rent to market when the home is sold to a new resident.
Full vacancy control is typical in most California MHC rent control jurisdictions, and it is the most pernicious. If rent control is being debated in your community’s jurisdiction, vacancy control is probably the most important component to fight. If the community you own or are considering buying is under vacancy control, understanding the remaining components of the rent control system becomes critical.
Stay Tuned for More Perspective on Rent Control
The next articles in this series will explain other aspects of MHC rent control systems. They will also demonstrate how, when the rules are fully understood, you can use the system to maximum advantage.
Our Insider Sources from Six Industry Leading Organizations
Bessire
Callaghan
Horton
Kassab
Newby
Rogosich
Many fee-based management companies are seeing an increase in demand for their services from owners of manufactured housing communities.
One of the drivers of the increase is the growing number of capital investors purchasing these properties — investors who have no experience managing land-lease communities. In other words, they need managers who have that experience, said Maria Horton, director of marketing for Newport Pacific, which manages 119 MH communities in 13 states.
Fee-based management comes in many forms
Horton defined fee-based management this way: “A contractual agreement between ownership and the property management company for oversight, development and betterment of a community.”
Some agreements only require management to collect rents, and report any problems to ownership. Other agreements ask management to handle all issues in the community, and only notify ownership with a periodic financial report, Horton said.
“It is truly in the hands of ownership as to what responsibilities the management company will assume,” she said.
Fee-based management companies charge clients in different ways. Some charge a percentage of gross rents, others charge a flat fee across the board. Newport Pacific charges monthly, either 4% of gross rents or a $3,000 fee — whichever is the greater amount, Horton said.
Fee-based management can encompass many tasks beyond collecting rents. Newport Pacific’s on-site managers, for example, oversee maintenance projects, issue legal notices for unpaid rent and park violations, and seek legal assistance when necessary. They prepare paperwork for tenant screenings and, when applicable, compile lease or rental agreements. They also do property inspections and inform tenants of items that need to be addressed. If ownership wishes, Newport Pacific can fill available mobile home lots in a community, either by renting park-owned homes or selling new homes, according to Horton.
Fee-based management companies can alleviate labor complications and liabilities for community owners by taking responsibility for all employment issues. For example, all managers and maintenance staff are hired as employees of Newport Pacific, Horton said.
Other Perspectives of Fee-Based Management
MHInsider queried other executives of companies that perform fee-based management services. Their answers are below.
There seem to be more companies providing fee-based management services for manufactured housing communities than there were a decade ago. Do you know why?
R.C. “Dick” Bessire, president of Bessire and Casenhiser:
Owners are getting older. They can’t keep up with all the new rules and laws, so they’re turning to professional management.
Todd Newby, president of Newby Management:
We receive several calls a month from community owners and/or investors looking to purchase manufactured home and RV communities who would like to speak with us about managing their community. Most of the investors calling us for management services make their living in other professions and rely on us to manage the day-to-day tasks for their community investment.
Michael Callaghan, managing partner of Four Leaf Properties:
The demand is massive. The influx of private equity firms into the space — particularly over the last five years — has opened a huge market for fee-based management. As all the newcomers to the space quickly learn, there is nothing easy about the MH business. It is a highly specialized, management-intensive business that requires a lot of expertise. You really cannot overstate the nuances.
The other lever that is often overlooked is technology. I like to comment that running an MH community is like running a car dealership and horizontal apartment complex all in one. You’re managing tenants and a piece of real estate while also acquiring, selling and financing homes. Good luck finding software on the open market that addresses all those needs! The best operators have built proprietary technologies and systemized platforms that rationalize those needs. Bottom line: You can’t operate these types of complex business models on the back of QuickBooks.
John Rogosich, CEO of MHPI Inc.:
The manufactured housing industry has become more sophisticated. Senior management and community managers now have designations as Manufactured Housing Manager and Certified Property Manager. These designations in turn require operating the MHC at a higher level of expertise, replacing the “mom & pop” mentality. We are closing the gap between apartment and mobile home community living due to the sophistication.
Mark Kassab, senior vice president of M. Shapiro Real Estate Group:
Many manufactured home communities that were owned by “mom and pop” operators over the past decade are being purchased by private equity groups and investors, thus resulting in a need for experienced management companies. Our company’s growth to approximately 15,000 fee-based manufactured home sites is split almost evenly between large private equity firms and private investors. The fee-based management growth has been attributed to the learning curve that owners want to avoid when buying a community. A strong fee-based management company will eliminate the learning curve and result in increased revenues with a reduction in expenses through efficiencies, all of which increase the value of the community.
What sort of services do fee-based management companies provide for manufactured housing communities?
Bessire:
For “mom and pop” operations, we basically do full service. We hand them a statement at the end of the year, and they turn the whole operation over to us. They trust us to comply with laws and maximize returns. We also manage for nonprofits. The bigger owners just want stable management they know they can grow with.
Newby:
I can’t answer for other management companies, but we provide a complete management service.
Callaghan:
Of course — taking payments, posting rents, managing facilities, maintaining the community — those are all the simple ones. Those are generally done for a percentage of total rents collected.
The more complex services involve improving/constructing lots, ordering and setting homes, rehabbing used homes, marketing (digital, online) and sales management. Those services tend to be more commission-based and can even look more like a joint venture. The market is finally starting to recognize that there is huge value in partnering with people who understand how to in-fill. With cap rates at their current levels, most rent-paying lots are worth 25-50 percent more than they were just a few years ago. Partnering with a seasoned operator only makes sense when there’s this much demand in the market and still so much capacity. The opportunity cost of letting lots sit idle is simply too high.
Kassab:
A strong fee-based manager should be able to provide a turnkey solution to the community owner, handling all day-to-day management operations. This includes the collection of rent and security deposits and bank account reconciliations of expenses. The overall physical appearance of the property, evaluation, and training of all on-site employees, and the implementation of a marketing strategy to increase the overall occupancy of the property is a fundamental key to success.
Investors should look for a management company that manages all the repairs and capital improvement projects, employee oversight, and tenant applications. Of great importance is bringing new homes to the community and renovating/refurbishing the homes for sale/rent to increase community occupancy. Creating a web page and having proper flyers prepared for the homes available is essential to a community operation. The strategies used by an experienced fee-based manager will improve landlord/tenant relations and bolster resident involvement, thereby reducing tenant delinquencies and accounts receivable at the property. A fee-based management company must provide the full menu of services in order for an investor to see the value.
Which of those services does your company provide?
Bessire:
We’re full service. We also do brokerage work.
Newby:
As a third-party management company, we provide complete management for manufactured home and RV communities. Complete management for us includes the following: Day-to-day operations, rule enforcement, negotiate and manage service contracts, track insurance for vendors, attend meetings with residents, background check applicants, oversee insurance policies and risk audits, regular management reports, maximize tenancy through proven programs, oversee the rent increase process, full accounting, full human resource management, resident relations, marketing and sales, brokerage services, chaplaincy program and emergency services.
Callaghan:
We provide them all, but our primary emphasis is working with operators who need to in-fill lots at a considerable level. We’re unique in that we have an embedded mortgage loan origination company, and a loan technology platform, that we offer. That enables us to be a turnkey partner — everything from basic property operations all the way through to providing a digital platform for marketing, sales, loan origination and financing. Our primary operating partner is one who needs to bring in a lot of homes, has a lot of growth potential, and needs a comprehensive solution. We’re on the opposite side of the spectrum from the classic “charge a fee and keep the lights on” manager. We want to build a lot of value for our select partners and we want to leverage our platform.
Rogosich:
The services we provide are accounts receivable, accounts payable, budget planning, ordering homes, hiring management and maintenance personnel, providing monthly and annual financial statements, and visiting the communities.
Kassab:
We provide comprehensive services in-house, all included in one fee! The proper operation of any community requires all of these services to be implemented in order for a manufactured community to achieve its maximum potential.
What are the advantages of fee-based management?
Bessire:
Professionalized management that maximizes returns for the individual investor or group. They don’t have to take complaints or negative calls from homeowners.
Newby:
Community owners can benefit from the investment in a community and not have to deal with the day-to-day operations while working in their chosen profession.
Callaghan:
I think an experienced property manager can out-perform an unseasoned one by 25-50% in the MH market. There are many flavors of MH communities, and there are many ways to derive value — through add-on services, better financing, operational efficiencies — as you move up the food chain. A seasoned management partner can move your property through that lifecycle and help you capture that value as you go. Simplistically, you don’t manage any two MH communities exactly the same way. They all have unique attributes that translate into accretive value if you know how to capture it.
Rogosich:
The advantage of fee-based management is an unbiased professional evaluation of the community. We can maximize the NOI and control the operating expenses. For example, within our company, our manager’s designation and experience will give the communities the resources they don’t currently have.
Kassab:
The financial advantage for an investor that utilizes an experienced fee-based manager should result in an increased value for that development. Many regions we manage have vendors that provide services to specific regions and fee-based managers with very distinct market knowledge in the areas they represent. An experienced fee-based manager will be involved with the state association, active with regional and national events that benefit the industry and are ahead of the curve on legislation that can impact the industry. We tell all of our clients, if they cannot see the value of the services we offer through increasing revenues, reducing delinquencies or reducing expenses, then we should not be hired.
Have you noticed a greater demand for fee-based management from MH community owners?
Bessire:
We’ve noticed an increase in demand. Here in California, I probably turned down 20 contracts last year. We only want to run things in a way that makes us feel comfortable. Some people want us to run the community just to make revenue, not to keep up the property. They just want you to get the dollars for them.
Newby:
From our perspective, demand has been the same for the last several years.
Callaghan:
The demand is off the charts. I take two or three calls a week from prospects. Unfortunately, many of the new arrivals are just getting started, so they are a little too small for us. Fortunately, consolidation is still continuing at a rapid rate, and as it continues many of those small guys are amassing large portfolios pretty quickly. The challenge is that those portfolios are typically geographically dispersed, under-resourced and lack economies. So, the demand is accelerating, but with it comes a need for more advanced and sophisticated solutions to address the new challenges.
We started our fee-based management program during the recession in 2008. In the past decade, we have grown to approximately 15,000 pads under fee management in 27 states. The calls seem to come in daily from owners looking for an experienced property manager.
Sun Communities, a leading national real estate investment trust (REIT) that owns, operates or has an interest in manufactured housing and RV communities, has entered into an agreement to acquire a 31-community manufactured housing portfolio for $343.6 million in a merger with Jensen’s, Inc.
The purchase price with adjustments will be paid through a combination of issuing common stock to Jensen’s shareholders and a cash payment.
The company acquires 31 communities with 5,230 developed home sites and better than 460 available expansion sites. Sun’s new communities are located in eight states with more than a third of the sites in the state of Connecticut. Seventy-seven percent of the communities are age-restricted. The portfolio was 92.5% occupied as of June 30.
“This acquisition is a great opportunity to further grow our manufactured housing portfolio with high-quality communities that match our investment criteria,” said Gary A. Shiffman, Sun Communities Chairman and CEO. “We are very excited to add the owners of Jensen’s as shareholders due to their belief in our ability to create ongoing value.”
The total purchase price is $343.6 million includes an allocation of approximately $8 million for expansion land and adjacent parcels ready for development. The purchase price will be adjusted at closing for prorations and certain other adjustments, including a reduction of approximately $60 million for debt that will be owed by Jensen’s as of the closing.
At the closing, Sun will issue to Jensen’s shareholders $274.8 million in shares of its common stock at an issuance price of $139.3072 per share based on a 20-day trailing volume-weighted average share price and pay the balance of the adjusted purchase price in cash.
The transaction is subject to customary closing conditions, and is expected to close by the end of 2019.
Kris Jensen, President of Jensen’s said, “After engaging in a thorough sale process for our portfolio, we are excited to be joining the Sun platform and to become Sun shareholders. We are impressed with Sun’s stellar reputation, successful track record of integration, and ability to operate their communities to the highest of standards.”
Datacomp has published its August 2019 manufactured home community rent and occupancy reports for six major markets in Southern California.
JLT Market Reports provide detailed research and information on communities in 178 major and midsize housing markets throughout the United States. Data includes the latest rent trends and statistics, marketing programs and a variety of other useful management insights.
Datacomp publishes the JLT Market Reports and is the nation’s #1 provider of market data for the manufactured housing industry. JLT Market Reports are recognized as the industry standard for manufactured home community market analysis.
August 2019 manufactured housing market data published in JLT Market Reports for Southern California include information on 505 “All ages” and “55+” manufactured home communities.
Altogether, the reports on the six markets’ manufactured home communities include data representations for 100,787 homesites.
“Manufactured home communities in the Southern California markets are showing a tremendous amount of stability in both rent and occupancy,” Datacomp Co-President and Chief Business Development Officer Darren Krolewski said. “Occupancy remains in the mid- to high-90s percentile everywhere. Occupancy reduced slightly in only one Southern California market and adjusted lot rent increases year-over-year spanned from 1.9 % to 4.9 %.”
More About JLT Market Reports
Each JLT manufactured home community rent and occupancy report from Datacomp has detailed information about investment grade communities in active markets. The detailed information includes:
Number of homesites
Occupancy rates
Average community rents, and increases
Community amenities
Vacant lots
Repossessed and inventory homes, and much more
JLT Market Reports also include management insights that rank communities by number of homesites, occupancy rates and highest to lowest rents. Established reports show trends in each market with a comparison of August 2019 rents and occupancy rates to August 2018, as well as a historical recap of rents and occupancy from 1996 to present date in most markets.
Each fully updated report for mobile home communities is a comprehensive look at investment grade properties within a market, enabling owners and managers, lenders, appraisers, brokers and other organizations to effectively benchmark those communities and make informed decisions.
John Carey, one of the 2019 Hall of Fame inductees, waves to his retail team to stand for recognition.
RV/MH Hall of Fame – Class of 2019
More than 400 manufactured housing industry and RV professionals gathered Aug. 5 at the RV/MH Hall of Fame in Elkhart, Ind., to celebrate a new class of inductees who expressed gratitude for the honor and a great amount of optimism for the future of the industry.
“I’ve never been more excited to give this address,” RV/MH Hall of Fame President Darryl Searer said prior to announcing that the hall has paid off all of its debt, phase one of the RV addition to the hall is nearly complete, and plans are being laid for a manufactured home museum.
“The progress I’ve seen in the last 90 days is incredible,” Searer told the inductees, friends and family who attended the dinner.
The 420 attendees who came to honor the new class arrived in Elkhart from no fewer than 25 states, the hall’s Ryan Szklarek said.
Raymond Broderick, of Superior Homes in Pennsylvania, gives his induction speech at the RV MH Hall of Fame in Elkhart.
Among the inductees from the manufactured housing industry was Raymond Broderick, of Superior Homes in Pennsylvania.
“This is such a great honor from a great industry,” Broderick said. “Our customers, their kids, their grandkids. This is generations of providing ‘The American Dream’.
“It’s true, if you choose a job you really love, you’ll never work a day in your life,” he said.
From left, Jess Maxcy, Maria Horton, Rick Robinson, Dick Jennison, and Lesli Gooch are among the 420 attendees from 25 states who came to Elkhart Aug. 5 to honor the RV/MH Hall of Fame class of 2019.
There are 407 RV/MH Hall of Fame Honorees
The latest Hall of Fame class, which brought in five new members from each of the manufactured housing and recreational vehicle industries, brings the number of professionals honored to greater than 400.
“To be mentioned in the same breath as all the folks on those plaques on the wall upstairs is a tremendous honor,” said John Carey, of Modern Home Sales and Midwest Homes in Topeka, Kansas.
Carey entered the industry for a second job in 1953.
“Little did I know it would turn into a lifetime occupation,” he said.
Carey opened his first dealership in 1986 and since opened a second location in the same market.
“Any business to be successful takes a lot of collaboration from many people,” he said, waving for his team to stand up. “I thank all you guys for your hard work and dedication.
“The homes have gotten bigger and better constructed,” Carey said. “But there are things about HUD code housing that have stayed the same… this industry is a lot of hard work, and it’s very rewarding work.”
‘I mean, you’re good but…’
Wally Comer of Adventures Homes applauds his fellow hall members.
“A lot of people warned ‘Wally, don’t do this… I mean, you’re good, but…” he told the attendees.
But Adventure enters its 10th year in business with three MHI manufacturer of the year awards (for a builder with three or fewer plants). And continues to win business by building homes the company’s customers are asking to have built.
“Our team does an absolutely fantastic job of getting that done,” Comer said.
Dick Ernst, an industry consultant and recently inducted Hall of Famer.
Dick Ernst, of Financial Marketing Associates Inc., said his induction came as a surprise.
“It wasn’t even on my radar,” Ernst said. “It’s not what I looked to achieve, and it is such a great honor.”
Leo Poggione, from Craftsman Homes in Nevada, is among the youngest entrants to the Hall of Fame.
“To be one of five people in the entire industry this year to be inducted into the hall of fame is a tremendous honor. I am so grateful for the support from so many people in this industry,” he said.
Leo Poggione, of Craftsman Homes, accepts his induction as one of the youngest ever recipients.
