Posts Tagged ‘asset class’

Manufactured Housing Communities Grow in Mortgage-Backed Security Deals

November 11th, 2013 Comments off

Although traditional property types such as multifamily, office, industrial and retail continue to dominate the majority of collateral in commercial mortgage-backed security (CMBS), non-traditional properties are increasing. Specifically, as informs MHProNews, manufactured housing communities (MHC) are making up a larger part of the deals. Although this asset class accounted for less than one percent in 2010, it contributed 2.5 percent in 2011, 3.2 percent in 2012 and has grown to 5.9 percent through Sept. of this year.

(Photo credit: Sun Communities, Inc.)

REO-to-Rental Market Expanding

January 9th, 2013 Comments off

Institutional investors as well as nontraditional investors are poised with $6 to $9 billion to acquire REO (real estate-owned) properties that many number from 60,000 to 90,000 in the single-family rental market, according to nationalmortgagenews. Keefe, Bruyette & Woods analyst Jade Rahmani says while this may account for only 15 percent of the distressed market, this REO-to-rental market implies long-term investment and the emergence of an institutional asset class. “Investor interest has increased meaningfully as the large foreclosure inventory combined with a secular shift towards renting has created the possibility of larger-scale investments in the space,” he notes. MHProNews has learned analysts estimate cash returns in the 5-7 percent range with the possibility of 15-20 percent total returns.

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Investing in MHCs gets High Marks

January 1st, 2013 Comments off

NuWireInvestor tells MHProNews the image most Americans have of manufactured housing communities comes from TV shows like “COPS” or from comedians like Jeff Foxworthy which not only portrays MHCs as undesireable but by association negates the investment opportunities that may be gained by investing in a community. While many of the eight percent of Americans who live in factory-built homes have incomes in the $20,000-30,000 range, some residents of MH in California and Florida are very well heeled, including Hollywood stars. In addition, since the Dept. of Housing and Urban Development set stringent standards for the production of manufactured homes in 1976, “mobile home” is a misnomer that carries on to this day, since it costs about $3,000 to move one from point A to point B, and 99 percent of them are in the same spot as when they were first sited. Banks like loans to purchase communities because they have the lowest default rate of any type of real estate, and they are the highest-yielding asset class in commercial real estate.

(Photo credit: MHVillage–Lake Village, Nokomis, Fla.)

Investors Look for Single-family Properties

October 1st, 2012 Comments off

Research firm Capital Economics tells HousingWire investors seeking to cash in on single-family rental properties best move quickly. Economist Paul Diggle with Capital says early buyers found prices 30 percent below peak, with potential yields of 8-12 percent. Noting it is likely a one-time opportunity, Diggle says as house prices recover and the more attractive assets are snapped up the investor interest will certainly fade, although there are still 3.8 million homes in foreclosure or delinquent. Says Diggle: “While single-family rental housing is going to be an important new asset class for some investors over the next few years, it is always likely to be dwarfed by the existing, multifamily REIT market.” As MHProNews has learned, there are also 375,000 REO (real estate owned) homes in the system.

(Image credit: Wikipedia—dollar houses)

Saving Foreclosures from the Wrecking Ball

January 18th, 2012 Comments off

A private equity fund is betting $250 million on foreclosed homes. Menlo Park, California’s GI Partners is investing in WayPoint Real Estate Group, a company that buys foreclosed homes at discount prices and rents them. The Wall Street Journal tells MHProNews this investment is one of the largest by an institutional investor in the single-family rental market. Richard Magnuson, GI Partners managing director, noting the thousands of foreclosed homes on the market, says the investment could grow to $1 billion over the next two years if this initiative is successful. Waypoint has been operating in the San Francisco and Southern CA market, but with this infusion of cash it may expand to Atlanta, Phoenix, South Florida, Chicago, and Las Vegas. Representing the fastest growing real estate asset class, single family rental investment is mostly done by mom-and-pop owners. Waypoint purchases half a dozen homes daily and whenever possible rents them back to the former owners. The Federal Reserve Bank of New York estimates foreclosures could increase by 1.8 million homes in each of the next two years.

(Photo credit: Jillian Berman/Getty Images)