Private Equity is Buying Mobile Home Parks

Cities hate these communities, so why does Private Equity love them?
March 5, 2024
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mobile home trailer park

Mobile home parks are areas of land subdivided into smaller spaces and rented out to owners of mobile homes, and cities hate them. The residents of these parks are stereotyped as lower-income, thus a potential safety concern and cleanliness hazard for the surrounding community. Basically, most people think that mobile home parks draw the wrong crowd. Still, mobile home parks are one of the most affordable private market housing options and are home to more than 22 million residents in the U.S.

So, why does Private Equity love this investment? Well, they check a lot of boxes from an investor viewpoint:

  • Passive income - limited work to generate significant cash flow from rental income
  • Lack of competition - cities won’t allow zoning for new mobile home parks
  • Significant demand - demand for this type of housing far exceeds supply
  • Legal protections - since mobile homeowners are renting the land and don’t actually own the land they are on, they are excluded in some jurisdictions from legal protections, such as notice periods for evictions and rent increase

Private Equity has been scooping up these parks over the last decade:

  • Blackstone purchased a $550MM MHC Portfolio in 2020, per Commercial Property Executive
  • Apollo acquired Inspire Communities in 2017, per Mergr
  • Stockbridge Capital Group owns YES! Communities, one of the nation’s largest owners and operators of manufactured home communities

Not every Private Equity firm is bad, but there have been enough headlines of Private Equity buying up these parks and significantly raising prices or, in some cases, even evicting tenants to establish a new price floor to make you question whether investment firms who are seeking a return threshold should be allowed to buy American housing. 

Private Equity plays in most business sectors, and mobile home parks are no different.

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