Navigating Current Market Conditions in Manufactured Housing

January 7, 2024

Let’s start by stating the obvious: 2023 transaction volume was down across commercial real estate.  While manufactured housing held up better than most asset classes, rising interest rates are leading to adjusted expectations.  Increasingly, financing deals have moved into the low 7 range, so cap rates have moved up to enable yields that exceed debt cost. That being said, the highest quality deals have been able to trade at lower cap rates with some even trading in the 4 range, just in lower volumes.


Beyond rising cap rates, there are second order effects of the rise of interest rates.  Specifically, this has created a difficult environment for regional banks and even some larger banks have exposure to CRE.  And while the poor performance of the professional office asset class has grabbed the headlines, there are downstream effects in inhibiting some banks ability to lend across real estate and/or reducing risk tolerance, which creates a dilemma and headwinds to issue new lending even in categories such as Manufactured Housing, which have held up relatively well.   


So how can the current market conditions best be navigated for successful sale of manufactured housing?  Take a thoughtful approach to improving and presenting your asset to stand out from the pack.

1. Increase Operating Efficiency

Increase NOI with consistency to strengthen the deal math and demonstrate reliable performance of the community.

2. Supply and Demand

In markets and communities where the demand side is currently strong and outstripping supply, share the metrics to tell the story of future growth.

3. Showcase Upgrades and Maintenance

Emphasize any upgrades, renovations, or meticulous maintenance to enhance the appeal and perceived value of a manufactured housing property.

4. Have a Comprehensive Go-To-Market

While you might expect some of the industry players in your geographic area to come to the table, there is an increasing pool of Buyers that should be tapped into so that you have the maximum potential buying audience.

5. Highlight Value-Add Opportunities

Demonstrate the ability for a new owner to increase the value of the property with a clear pathway to higher revenue and income.

6. Use a Proven Approach

In the current market, opportunistic and shotgun approaches to selling are more challenging.  Use a proven process to smartly proceed on each detail of your transaction, from preparation to successful closing.

And of course, hire an expert brokerage (encouraging you to consider SkyView Advisors).  In the current market environment, it’s more important than ever to work with a brokerage specializing in seller representation as there are specific strategies that can maximize the value of selling manufactured housing properties.

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