NorthMarq closes Seven-Property Manufactured Housing Portfolio in Arizona for $15 million

PHOENIX, ARIZONA (April 11, 2019) – Last Friday, NorthMarq sold a seven-property Manufactured Housing Community portfolio comprised of 754 sites for $15 million. The properties were located throughout Phoenix, Mesa, Peoria, Buckeye, and Casa Grande, Arizona.

The NorthMarq Manufactured Housing team of Don Vedeen, Jared Bosch, and Chris Michl represented both the seller and the buyer in this transaction.  Good Living Investments of Denver, Colorado formed seven entities to acquire the assets. Coeler Trust of California was the seller. 

“The Arizona portfolio was a strategic value-add opportunity for the buyer, and the acquisition provided economies of scale,” says Vedeen, vice president of NorthMarq’s manufactured housing investment sales group. “With a number of great locations within the Phoenix Metro and the potential to increase occupancy across seven parks, the buyers anticipate profitable returns.”  

Demand for manufactured housing strengthened in 2018 supported by accelerating economic growth and rising housing costs, as reported in NorthMarq’s fourth quarter Manufactured Housing market report issued April 2019. Due to a 5 percent increase in sale prices for single-family homes and a 4.9 percent rent increase in apartment rent, housing became less affordable at the same time construction costs continued to rise. 

“Manufactured housing benefits in these conditions, with occupancy rising and rents pushing higher, albeit at a more modest pace than in the apartment sector. These trends are expected to continue in 2019, although employers are not predicted to add jobs at the same pace they did in the past year,” said Pete O’Neil, NorthMarq’s director of research. 

Other key findings include:

- Investors are responding to the favorable conditions, and sale velocity for manufactured housing communities is gaining momentum. 

- Transaction activity rose by approximately 20 percent in 2018, compared with declines across most other commercial property sectors. 

- Prices rose and cap rates compressed, particularly during the fourth quarter of 2018. 

- While traditional investment in performing properties accounts for most of the investment volume, transaction activity is also receiving a boost from the establishment of Opportunity Zones in the 2017 tax law as well as some parks being sold for redevelopment into other residential uses.

See the complete Manufactured Housing Market Report: https://www.northmarq.com/manufactured-housing-q4-market-report-investment-activity-on-an-upswing/