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Sun Communities Under the Hood – Data Reveals – Manufactured Homes, Communities, Comparisons with Conventional, Multifamily Housing

April 12th, 2019 Comments off

 

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Someone might take HBO’s Last Week Tonight with John Oliver satirical hit on “Mobile Homes” at face value.  For those lacking sufficient insight, they might be left with the impression that buying a manufactured home is stupid, because the industry is filled with nothing but heartless sharks.  The examples they gave included Warren Buffett, Clayton Homes, and Frank Rolfe, among others.

 

While the industry arguably has problems, as the fact-check of Oliver’s video linked here reflects, those internal and external challenges are from a minority of firms, not the majority.

 

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MHProNews is pro-free enterprise, as well as pro-consumer. Money honestly earned is to be celebrated, not denigrated. What John Oliver’s report spotlighted does not apply to all firms, it only applies to a few, albeit typically larger ones.

 

What follows is not a fact check, but rather a review of the most recent Sun Communities investor relation information.

This is not an endorsement, nor a critique.  Publicly traded companies are not guaranteed to provide accurate information, but they certainly are required to provide accurate information with plenty of disclosures.

SunCommunitiesIncSUIManufacturedHomeSalesPriceComparisionConventionalHousingCostFeb2019IRDec312018DataManufacturedHomeCommunityDailyBusinessNewsMHProNews

This first slide addresses the surprising value comparison, that Oliver’s video did note. Oliver’s video called for communities to become ROCs – resident owned communities. As Paul Bradley, ROC USA President , cited by Oliver’s video, told MHProNews, there are good community operations. It would be unfair to reject them all, they should be discerned on a case by case basis. Beyond ROCs, Oliver did not provide any options that could supplant the value that manufactured homes offers the public, particularly those who may not be in a position to afford a conventional house.

 

The timing for this report here on MHProNews is relevant for this reason.

 

SunCommunitiesIncSUIRentalofManufacturedHomeVsOtherRentalComparisionsFeb2019IRDec312018DataManufacturedHomeCommunityDailyBusinessNewsMHProNews

 

While the Oliver video, relying in good measure on the MHAction white paper previously reviewed on the Daily Business News. So careful, regular MHProNews readers were not taken by complete surprise by the claims by MHAction and their strategic allies – the Private Equities Stakeholder Project and Americans for Financial Reform – in their strike on the industry’s giants. ICYMI, the report is found at the linked text-image box below.

 

“Billion Dollar Empire Made From Mobile Homes,” What Washington Post’s Peter Whoriskey Didn’t Report

 

With that brief backdrop, let’s unpack some information developed by Sun Communities Inc (SUI).

 

SunCommunitiesIncSUI-MHGrowthRVGrowthMHProductionVsShareSingleFamilyHousingStarts-Feb2019IRDec312018DataManufacturedHomeCommunityDailyBusinessNewsMHProNews

Manufactured housing is underperforming, as the third graphic above reveals. What the second graphic doesn’t reflect is that 20 years ago, RVs trailed manufactured home (MH) production by 3 to 2 in favor of MH. Today, RVs outsell MH by some 5 to 1.

 

Per their website, The company owns and operates or has an interest in 371 manufactured housing and recreational vehicle communities located in 31 states throughout the United States and Ontario, Canada, as of December 31, 2018. Sun Communities’ portfolio consists of over 128,000 developed sites.”

 

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They added that, “Established in 1975, Sun Communities became a publicly owned corporation in December, 1993. The company is a fully integrated real estate investment trust (REIT) listed on the New York Stock Exchange under the symbol: SUI.”

 

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The SUI stock trend for the last five years was inserted by MHProNews as shown above, per Bloomberg on 4.11.2019.

 

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The screen captures shown are from their most recent Investor Relations (IR) presentations herein are not necessarily in sequence.  Once more, our purpose here is to use their information to shed new light on the MHAction white paper, which was a behind-the-scenes driver for Oliver’s viral video.

A secondary benefit of this report is to clarify for investors and perhaps shaken, newcomers to our industry that this industry isn’t as predatory as some might want to make it appear to be.   The balance of the Sun IR report is found here as a download.

That MHAction white paper spotlighted some egregious scenarios that have in fact occurred in the industry. Here on MHProNews and our sister site – MHLivingNews – we’ve features some of the same data, but always with bright line distinctions between the few that do such deeds, vs. the balance who strive to do business in an honorable fashion.  Why didn’t MHI make that argument?  Or is it because those who were spotlighted where essentially all tied to MHI, and the Omaha-Knoxville-Arlington axis?

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To see a sample of our emailed news update, click here. To sign up for the factory-built home industry’s #1 headline news, click here or the graphic above.

That’s this morning’s initial edition of News through the lens of manufactured homes, and factory-built housing.” © where “We Provide, You Decide.” © ## (News, analysis, and commentary.)

 

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Related Reports:

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For Want of a Nail – Manufactured Housing

Michigan Association’s Video Campaign, What They’ve Said About Manufactured Home Living

 

Bryan Manufactured Homes Ban Passed, But Petition Count, Other Legal Moves May Stop Texas City

HBO’s John Oliver on Last Week Tonight Mobile Homes Video, Manufactured Home Communities Fact Check

 

Why is Seattle Dying? Affordable Housing, Misplaced Compassion, and Manufactured Homes

MHARR Calls on New Fannie Mae CEO Hugh Frater to Fully and Properly Implement Federal Law

HUD Study, Analysis of Zoning Discrimination Against Manufactured Housing Sought

 

 

 

 

 

Wells Fargo was Freddie’s Top MHC Seller in 2015

February 6th, 2016 1 comment

freddie_mac_loan_volume_scotsmanguide__freddie_macFollowing a story MHProNews posted Jan. 14, 2016 regarding GSEs Fannie Mae and Freddie Mac’s multifamily loans for 2015, which totaled just under $90 billion, rebusinessonline reports CBRE was Freddie’s highest-producing multifamily mortgage seller with $6.96 billion in originations.

Making the announcement at the Mortgage Bankers Association (MBA) convention in Orlando, Freddie reported Wells Fargo Multifamily Capital was the top manufactured housing community seller and affordable housing seller with $3.53 billion in originations. Freddie ranked number five on the list of the top multifamily lenders.

The nation’s largest source of financing for multifamily housing, Freddie Mac’s loans range from $1 million to several billion dollars. Approximately 90 percent of the loans are for low-to-moderate income rental units. Additionally, Freddie securitizes about 90 percent of the multifamily loans it purchases, which transfers the credit risk from taxpayers to private investors. ##

(Image credit:scotsmanguide-Freddie Mac loan volume)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

Manufactured Housing Included in GSE Lending

February 2nd, 2016 Comments off

mortgage app  housingwire creditHitting a record high of nearly $90 billion in multifamily lending in 2015, the government sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, are poised to hit another new lending record this year as their volume lending caps are adjusted by the government.

Freddie Mac topped the two multifamily lenders with $47.3 billion in loan purchase volume, spiking from $28.3 billion in 2014, according to what costar tells MHProNews. Ninety percent of the $42.3 billion in financing provided by Fannie Mae to the multifamily market in 2015 supported 569,000 units of multifamily housing.

Said David Brickman, executive vice president of Freddie Mac Multifamily: Our financing is in every corner of the multifamily market and more diverse than ever, reaching into small balance loans, manufactured housing communities, seniors, student and government subsidized properties. We are focused on increasing the availability of mortgage capital, especially to the affordable and workforce housing sectors where demand continues to far outstrip supply.”

Roughly $17 billion was not subject to the Federal Housing Finance Agency’s $30 billion cap and included loans for manufactured housing, senior housing, affordable housing and smaller multifamily housing.

Of the total 2015 multifamily production, manufactured housing communities accounted for $786 million, an increase of 58 percent over the $496 million in 2014.

Melvin L. Watt, director of the FHFA, says the agency will maintain the $30 billion cap for the GSEs in 2016, and will perform a quarterly review of the market to determine if adjustments are necessary. He said, “We will continue to exclude from the cap loans for affordable properties, including those in higher-cost areas. We will also continue to exclude certain loans for manufactured housing communities, as well as seniors housing and small multifamily properties affordable to low-income tenants.” ##

(Image credit: housingwire)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

August Housing Starts Decline 14.4 Percent

September 18th, 2014 Comments off

housing slides  cnnmoney  creditThe U. S. Department of Housing and Urban Development (HUD) and the Census Bureau inform MHProNews housing starts fell in all four regions of the country in August by 14.4 percent to a seasonally-adjusted annual rate (SAAR) of 956,000 units. Multifamily production led the downward trend, falling 31.7 percent, while single-family dropped 2.4 percent to a SAAR of 643,000. The National Association of Home Builders (NAHB)’s Chairman Kevin Kelly says despite the slip, “Single-family starts are still 8 percent above last year’s level.” Regionally, the Northeast fell 12.9, the Midwest lost 10.3 percent, the South slid 10.9 percent and the West, a whopping 24.7 percent. In August, building permits slipped for single-family homes 0.8 percent, but for multifamily it dropped 12.7 percent. ##

(Image credit: CNNMoney.com–housing slides)

Housing Starts and Building Permits Decline in June

July 18th, 2014 Comments off

Single and multifamily housing starts plummeted 29.6 percent in the South, the nation’s largest region, for June, according to figures released by the Dept. of Housing and Urban Development (HUD) and the Census Bureau, bringing down the national average to minus 9.3 percent. The other three regions of the country all posted gains– the Northeast increased 14.1 percent, the Midwest was up 28.1 percent, and the West rose 2.6 percent—as the seasonally-adjusted annual rate hit just 893,000. The National Association of Home Builders (NAHB) further tells MHProNews single-family housing starts were down to 575,000 units in June, while multifamily production fell 9.9 percent to 318,000 units. Building permits for June fell 4.2 percent to a seasonally-adjusted annual rate of 963,000 units, of which multifamily permits comprised 332,000, registering a 14,9 percent drop, while single-family permits gained 2.6 percent to 631,000 units.##

(Image credit: housingwire.com)

Sam Zell: With Home Sales Skittish, Multifamily Rental is Good Investment

July 3rd, 2014 Comments off

According to etfdailynews.com, Jeffrey Gundlach, CEO of DoubleLine Capital, said at the Sohn Investment Conference, “Single-family housing is overrated. Renting is more appealing across all age groups, all parts of the U.S., city, suburb, small town and rural.” Investor Bill Miller of Legg Mason disagreed, saying housing affordability and low mortgage rates will lure homebuyers back to the market. Sam Zell, Chairman of Equity Residential, the nation’s largest apartment owner with almost 400 properties and more than 110,000 units, said the trend to rent is lifestyle driven more than economic. Noting it’s the deferral of marriage and delay of having children, he said, “I don’t think the multifamily market has ever had a better set of future demographics.” With a dividend yield of 3.2 percent, Equity Residential targets the higher-end markets that are more insulated when it comes to downturns: San Francisco, Washington, D. C., New York, Boston and southern California. As MHProNews knows, Zell is also chairman of Equity LifeStyle Properties, the largest owner of manufactured housing and recreational vehicle communities (MHCs) in North America, with nearly 380 communities and over 140,000 homesites. ##

(Photo credit: Equity LifeStyle Properties, Lake Haven, Clearwater, Florida)

Multifamily Home Building on the Rise

February 5th, 2014 Comments off

Panelists during a press conference at the National Association of Home Builders (NAHB) International Builders’ Show (IBS) in Las Vegas says strong demand for apartments will increase over the next several years. Says NAHB chief economist David Crowe, “The multifamily market has rebounded significantly from its trough in 2009 at 82,000 multifamily housing starts to 340,000 in 2013. NAHB is forecasting 363,000 multifamily housing starts in 2015, which is above the previous longer term average of 340,000 as more young adults prefer renting.” As MHProNews.com has been informed, he says the strong demand for multifamily is due to three factors: First, production is catching up to the normal flow which was hampered during the housing bubble; second, the rising demographic of the echo boomers, born after 1980, will continue to grow in size; and third, young adults who normally might have chosen homeownership are hindered by tight lending standards, a slow employment market and lower entry salaries. Crowe adds, “The share of households that rent rather than own has increased steadily since 2004 and will likely continue until jobs are more secure, mortgages more accessible and careers more stable.”

(Photo credit: bloombergbusinessweek.com–new multifamily building)

Residential Building Rises in 2013

January 21st, 2014 Comments off

Despite single-family housing starts falling seven percent in December, 2013 from November’s surge of 16 percent, when builders were scurrying to put foundations in the ground before the freeze set in, housing starts for the year were up 15 percent over 2012. The Census Bureau informs MHProNews multifamily starts, which also fell in December—minus 18 percent over November—rose 25 percent over 2012. According to nationalmortgagenews, economists at IHS Global Insight say while builders began 923,400 homes and apartments in 2013, “They completed only 762,000 homes—the fifth lowest on record (data started in 1968), and not even half of what we judge to be normal.”

(Photo credit: Fotosearch)

Multifamily Housing will Remain Strong

December 20th, 2013 Comments off

A report from CBRE, the world’s largest commercial real estate services firm, states that multifamily rents will increase 2.5 percent a year for the next three years, with the pace of construction leveling off at 216,000 units each year through 2018. It has been 3.9 percent growth a year since the beginning of the recovery in 2010. “The multi-housing sector is only now beginning to fill a supply shortage that has existed following a three-year-long drought in development resulting from the recession,” Jim Costello, CBRE’s Head of Americas Investment Research, said in the report. “We anticipate that most of the new supply that will come online over the next few years will be absorbed by pent-up demand.” According to worldpropertychannel.com, tighter credit will keep the supply more equivalent to the demand, as banks are only lending to developers with proven track records. Boston, Washington, D. C., Seattle and Southeast Florida offer the best opportunities for investment because rent levels are higher than construction costs in those markets, as MHProNews.com has learned.

(Photo credit: bloombergbusinessweek.com–new multifamily housing)

Senior Affordable Housing gets Boost from HUD

December 18th, 2013 Comments off

The U. S. Department of Housing and Urban Development is providing $14.8 million in redevelopment funding for approximately 19,000 seniors with low-to-very low incomes in order to prevent their displacement from 1,700 units located in 12 properties across six states. Part of HUD’s Section 202 “Supportive Housing for the Elderly” program, nationalmortgagenews.com reports most of the multifamily mortgages will mature during the next ten years when rental affordability will end without funding from HUD. As MHProNews has learned, the Senior Preservation Rental Assistance Contracts from HUD carry interest rates of six percent and below with 10 and 20-year terms.

(Image credit: U. S. Dept. of Housing and Urban Development)