RCA Insights

Spotlight on Manufactured Housing Acquisitions, Pricing

By on August 31st, 2021

Manufactured housing represents a small share of the U.S. commercial real estate market, at approximately 1% of total deal volume, but activity in this alternative sector is gaining momentum.

Sales of individual properties reached the highest levels yet in the second quarter. Acquisitions in the four quarters through Q2 2021 totaled $4.1 billion, up 48% compared with the prior four quarters and 30% above the average seen since 2017. Portfolio sales also climbed for the four quarters through Q2 2021, to $2.6 billion, augmented by a jump in activity at the start of the year.

charts showing US manufactured housing deal volume and pricing trends

Pricing for manufactured housing assets, which are primarily located in suburban locales, has remained tight. RCA Hedonic Series cap rates, which control for quality and locational differences in the underlying sample, fell 30 bps year-over-year to reach 5.0% in the second quarter. For apartments located outside the 6 Major Metros, RCA HS cap rates have been compressing in recent years and also hit 5.0% last quarter. These are the lowest levels ever seen for both housing sectors.

Since 2017, private buyers have dominated the manufactured housing market. However, institutional players are gaining share and accounted for 23% of volume in the past 24 months, up from the 13% average seen during 2017-19. Looking at the top 10 buyers over the past 24 months, four are institutional investors. These players secured their ranking by acquiring their manufactured housing assets in bulk: on average, 83% of their total acquisition activity involved portfolios.

==

© Real Capital Analytics

A version of this article first appeared in the July review edition of US Capital Trends. Clients of Real Capital Analytics <<click here>> to download the PDFs and data files for this edition.

Also on RCA Insights:

Spotlight on US Medical Office Investment and Pricing

Interest in Life Sciences Explodes. Here’s the Latest Data.

US Self Storage Bucks Trend, Pulls In Record Spending

 

Haley Crimmins

Vice President, MSCI Research
haley.crimmins@msci.com

Haley works in MSCI’s real estate research team and is based in New York. Her focus is on the commercial real estate capital markets and she is a key contributor to the firm’s U.S. reports. Haley joined MSCI through its acquisition of Real Capital Analytics, where she began her career in 2017. She holds a bachelor’s degree in mathematics from Connecticut College.