Australia, Oregon, Tennessee, Canada, and Wells Fargo Embrace Manufactured Housing
Hometown America heads to Australia; Portland Oregon’s’ Housing Bureau helps save some much-needed affordable housing; UMH hopes to add over 558 manufactured homes to three Nashville, Tennessee mobile home parks; a Canadian firm announces the $30 million acquisition of three manufactured housing communities in California, as Wells Fargo Commercial Real Estate announced their $82 million joint venture with Federal Capital Partners and Horizon Land Company, helping to refinance 21 manufactured housing communities throughout the US.
It’s Monday, December 12, 2016, which can only mean one thing here at manufacturedhomes.com, it’s time to drill down on last week’s flurry of activity within the manufactured housing industry.
Hometown America Goes Australian –
Unlike many modern countries, Australia has embraced manufactured home communities, known by Aussies as caravan camps, primarily due to a shortage of home sites for construction of traditional single family site built housing. As a result of the Australian government’s long-held strict immigration policies, the population is aging rapidly and creating a lack of available affordable housing for a growing number of retirees. When you consider the following, you might wonder how Australia would have a shortage of sites on which to build housing. The Australian landmass is 3 million square miles, compared to 3.8 million square miles of U.S. land. Australia has a resident population of only 24 million compared to the U.S. population of 320 million. Unlike the U.S.A., the primary concentration of the world’s population is centered on the seaboard in southeastern Australia. The balance of Australia, the world’s largest island, is virtually uninhabitable desert, primarily due to the lack of a fresh water supply. According to the Australian Financial Review, Hometown Australia, a subsidiary of major manufactured community operator, Hometown America Corporation, based in Chicago, has about $300 million in prospective acquisitions in negotiation as it looks to establish an Australian portfolio of manufactured home estates (MHEs). Representing an ambitious move, the company hopes to make major inroads within the Australian market for prefabricated housing, becoming a key player in Australia’s rapidly expanding senior housing sector. Hometown America owns and operates more than 50 manufactured home communities comprising some 23,000 home sites across 10 U.S. states, many of which are popular with retirees. The company said in a statement, “Hometown Australia’s business plan is to grow organically through the acquisition of existing, and the development of new high-quality residential land lease communities.” Demography is a big driver for the sector. The growing number of retirees face a less affordable housing market, creating the need for low-cost housing option. A cultural shift in attitudes is also underway. Long a feature of American society, prefab housing estates, often converted from caravan parks, (mobile parks), are gaining acceptance in large cities and along the coast. The demand for MHE dwellings is forecast to increase by almost 30,000 additional units by 2026, representing an increase of almost 40 percent from the 2011 level, according to an industry report by Colliers. And, in a worst-case scenario, demand could surge to almost 50,000 extra units over the same period.
Holiday Spirit Felt by Portland Mobile Home Park –
We are pleased to share this “feel good” story appropriate to the holiday season, as reported by the OPB on December 4, 2016. For the first time, the city of Portland, Oregon has acted to preserve a mobile home park threatened with closure and has gained a new nonprofit to preserve and manage such parks. Portland Housing Bureau provided a $1.25 million loan to the Living Cully coalition, which used the money to purchase the Oak Leaf Mobile Home Park, in a Nov. 30 deal announced Wednesday, Dec. 7. The owner of Oak Leaf had struck a deal early this year to sell the rundown complex to a company that planned to redevelop it for other uses until residents intervened with the help of Living Cully, members of the faith community and others. The deal to sell the complex to Living Cully means 25 Oak Leaf households can stay in their homes, and their rundown complex will be upgraded. The Oak Leaf mobile home park in the Cully neighborhood is one of the last places in the city that rents units for under $500 a month. It has spaces for 35 mobile homes and houses a number of seniors, veterans and people with disabilities. If evicted, many would likely become homeless. Living Cully immediately turned over management of the park to St. Vincent de Paul of Lane County. St. Vincent de Paul manages five mobile home parks in Lane County, and now will be expanding into the Portland market. St. Vincent de Paul will apply for federal block grant funding next year and expects to buy the complex from Living Cully, enabling it to repay the city loan. In Lane County, St. Vincent de Paul has helped renovate five rundown mobile home parks similar to Oak Leaf, by making improvements to common areas at its parks, and sometimes helps residents acquire new manufactured homes. Residents maintain ownership of their homes and pay space rent to the non-profit. “Affordable housing is a scarce resource everywhere in the state, especially in Portland,” said St. Vincent de Paul of Lane County Executive Director Terry McDonald, in a news release. “We need to take advantage of any opportunity to protect and preserve mobile home parks, which are a vitally important source of affordable housing.” At a time when housing prices are skyrocketing and demand for new apartments is spiking, housing experts expect continuing redevelopment pressure on older mobile home parks But now the Portland Housing Bureau has made its first venture into protecting such parks, and the presence of St.Vincent de Paul here means there’s a new player in town that can assume ownership of embattled parks and preserve them. According to an Oregon state database, there are 66 mobile home parks in the city of Portland with 3,241 spaces. There is also another 25 parks elsewhere in Multnomah County, with 1,852 spaces. Mobile home parks and manufactured home parks supply believed to be the largest share of affordable privately owned housing.
(Excerpts from online posting by The Tennessean): Before moving into a rental manufactured home at the Shady Hills mobile home park off Dickerson Pike, Frankie Robinson had a negative perception of such dwellings and the people who live there. I was just thinking of ‘trailer trash’ and it just wasn’t for me,” said the onetime townhome resident and small business owner who has experienced friendly neighbors in her community of just over a year. Robinson, who rents her two-bedroom, two bath mobile home at Shady Hills for $750 a month, is a growing number of Nashville-area residents now seeing manufactured housing at mobile home parks as an alternative to apartments and single-family homes that have been rising sharply in costs. To meet rising demand, Shady Hills’ Freehold, N.J.-based UMH Properties Inc. wants to expand a trio of Nashville area mobile parks to accommodate more than 559 new manufactured homes. On Thursday, the Metro Planning Commission’s recommended that the Metro Council approve UMH’s request for a rezoning to allow 56 more homes at its 130-home Trailmont Community in Goodlettsville. Early next year, the commission will take up a request to add 155 mobile homes to UMHs 276 unit Holiday Village community on Gizzard Avenue Avenue. And in Columbia, Tenn., the mobile home park landlord is seeking to double homes at its 348-unit Countryside Village park. “Nashville is a wonderful market for us,” sad Jeffrey V. Yorick, UMH’s Vice President for Engineering, citing local growth as driving the company’s expansion plans. “It’s the economy in Nashville — employees moving to the area, redevelopment is occurring all across the region.” In metro Nashville, there were 38,348 mobile homes last year with a median value of $68,300, up 6.6 percent from 35,986 such homes in 2011 according to the U.S. Census Bureau’s 2015 community survey five-year estimates. * Find a mobile home community near you today in Tennessee
TORONTO, Dec. 5, 2016/CNW/ – Tricon Capital Group Inc., a principal investor and asset manager focused on the residential real estate industry, announced today that its Tricon Lifestyle Communities (“TLC”) investment vertical has acquired a portfolio of three manufactured housing communities in California. Two of the communities, Riverdale Estates and Palmdale Estates, are age-restricted properties totaling 336 rental pads located in Indio, California. Indio sits in the Coachella Valley, a popular residential market for retirees near Palm Springs. The third property, Springdale Estates, is located in San Marcos (San Diego County) and is a family community consisting of 85 residential pads. TLC intends to execute a capital improvement plan focused on the amenity center and entrance features at all three communities. The total purchase price of $30.4 million was satisfied with cash and a seven-year non-recourse financing package at an average 62% loan-to-value and 3.85% fixed interest rate. This transaction expands TLC’s presence into California and increases its portfolio size to 3,065 residential pads across 14 communities, with approximately $129 million of assets under management.
Wells Fargo Makes $82M Bet on 21 Manufactured Home Communities –
Wells Fargo has provided $82 million to a joint venture between Federal Capital Partners and Horizon Land Company for the refinancing of 21 manufactured home communities, Commercial Observer has learned. “Lending for manufactured home communities is an important focus for Wells Fargo Commercial Real Estate,” said Lew Grace, an executive vice president in Wells Fargo’s real estate group. “We are excited to work with our long-standing customer, Federal Capital Partners, and their operating partner and new customer Horizon Land Company on this portion of their large and growing portfolio of communities.” The properties are located in Pennsylvania, North Carolina, South Carolina, Delaware, Maryland and New Jersey and comprise 3,178 home sites. The portfolio is more than 90 percent occupied and includes the Tilton Terrace community in Egg Harbor, N.J.(228 home sites), Delsea Woods in Vineland, N.J. (131 home sites) and Dorchester Village in Charleston, S.C. (312 home sites).
Australians, thinking outside the traditional housing paradigm!