8 minute read
Panelists and Presenters
by MHInsider
The Louisville Show PANELISTS AND PRESENTERS
One of the most valuable aspects of attending a well-run manufactured housing industry trade show is the lineup of expert presenters who will take the stage during the event. Skyline Champion Corporation President Mark Yost will provide the event’s keynote address on Thursday, Jan. 19 at 11 a.m.
The Louisville Show in 2023 provides more than a dozen experienced manufactured housing professionals from all areas of the business — from manufacturing to sales and marketing to community operations and retail. The thousands of attendees who sit in on a panel or presentation will go away with a much greater understanding of what it takes to run a successful enterprise in the manufactured housing industry.
“Our return to Louisville features leaders from the across manufactured housing industry,” Oaks said. “Attendees will get to hear the latest announcements, trends, and industry updates directly from the experts.”
THE LOUISVILLE SHOW 2023 LINEUP OF SPEAKERS INCLUDES:
MARK BOWERSOX Manufactured Housing Institute
RAMSEY COHEN | Clayton Homes
SHAWN CARNAHAN | Adventure Homes
KEN CORBIN | CallKenCorbin.com
ERIC COULTER | Cavco Industries
LUKE FOSTER | Park Lane LOGAN HANES Kentucky Manufactured Housing Association
LANCE HULL | 21st Mortgage
DARREN KROLEWSKI | MHVillage/Datacomp
BARRY NOFFSINGER | Credit Human
ERIC OAKS | Indiana Manufactured Housing Association & GreenState Credit Union
BYRON STROUD | Skyline/Champion
JOSE VILLARREAL | Triad Financial Services
MARK YOST | Skyline/Champion
UMH PROPERTIES, INC.
A PIONEER IN MANUFACTURED HOUSING
As a publicly traded REIT (NYSE:UMH), we have been providing quality a ordable housing since 1968. Our portfolio provides high pro t margins, recession resistant qualities, reliable income streams and the potential for long-term value appreciation.
• $1.8 billion in total enterprise value • 133 communities, 25,300 homesites, 1 joint venture community containing 200 homesites, 11 states • Housing approximately 21,000 families • 7,500 total acres, 3,800 acres in Marcellus and Utica Shale regions
UMH Awarded 2021 Manufactured Home Community Operator of the Year and 2021 Retail Sales Center of the Year by the Manufactured Housing Institute For more information, visit www.umh.reit or contact ir@umh.com
The Opportunity in Uncertainty:
A 2023 Industry Preview
by Kevan Enger
2022 was the year of inflation and interest rates. It seems that almost every conversation in the industry has come back to one of those two topics with more questions than answers…
“Will inflation finally stall?”
“Will the Fed raise rates again?”
“Will the interest rate hikes cause a recession?”
“Will the next interest rate increase be at a higher or lower pace?”
“When will the debt markets start to loosen up again?”
All of those questions have created a great deal of uncertainty in the marketplace. By nature, investors need to know the numbers, have a general idea of where things are going, and have an understanding of what is taking shape; and right now, everything seems unpredictable.
Although the pandemic appears to be in the rearview, it was the catalyst for the change and unpredictability we are experiencing. From a market crash that never came, to a recession that never fully materialized, we’ve had an economy that did the unexpected…it boomed. Prosperity came despite the pandemic, closures, and supply chain shortages all thanks to a rapidly adapting consumer and new demand as the population moved, people began working from home, and a new era emerged.
This new era is unchartered territory. Couple that with inflation, rapidly rising interest rates, a war, and fear of a recession, and you have the perfect recipe for a great deal of uncertainty. »
So how is this continued uncertainty impacting the market for communities? In this article, we will look at where the market is today and what to expect in the coming year.
The Debt Market
Interest rate hikes have put the debt market at ground zero. After seven interest rate hikes this year and another half point likely early this year, it’s no wonder that
Rental rates across the MHP space continue to rise. Most MHPs remain at below-market rents, providing a great deal of room for potential upside in rents.
have seen an opening and they’re cautiously stepping through it as supply has started to loosen in step with the tightening debt market. More supply means more opportunities for better deals as cash buyers brandish their advantage and liquidity.
However, everyone is keeping their eye on cap rates and how they have been impacted. For 5-star properties, for example, the market is looking at manufactured home communities that were delivering a cap rate of three or three and a half, now coming in at a five or five and a half.
Three-star properties that were once at a five to a five-and-a-half cap, may now be somewhere between seven and seven and a half.
This rapid shift has taken many owners by surprise, and it’s important to understand that while we can’t control interest rates there are factors we can work with to optimize property value.
the debt markets have come to a grinding halt. Changing at a pace not seen since 2008, albeit in the opposite direction, lenders are simply not able to effectively underwrite loans with rates rising at the current pace. As a result, leveraged buys that were ruling cash-on-cash returns across asset classes less than a year ago are now on hold. But, for how long?
The Cash Market
Meanwhile, the debt market’s loss is the cash buyer’s gain. Buyers with pockets full of cash Find Ways to Optimize
To illustrate, at our shop we’re working with owners on a variety of factors that have an impact on the value of a property. Our analysis looks at everything from operating expenses and maximizing the competition among potential buyers, to developing a custom marketing strategy that optimizes value and price.
This approach is critical since this past year has been particularly challenging on park owners due to rising costs. Inflation has driven up operating costs for labor, utilities, materials, and insurance. In Florida, for instance, communities throughout the state have the added burden of rising insurance costs, especially after hurricanes Ian and Nicole.
However, a cookie-cutter approach to curtailing expenses simply won’t be enough. The question isn’t how can we cut expenses? It’s how can we add value while cutting expenses.
The Outlook
While the debt market has temporarily stalled and cap rates have inched up, there is an abundance of dry powder waiting on the sidelines for clearer signals on where the economy, inflation, and rates are headed.
It’s essential for community owners to know that while the market is not moving at the velocity it was six to eight months ago, it’s still very active. Savvy investors are looking beyond the static to the fundamentals, and the fundamentals of the market remain strong.
Historically, the mobile home park space has been widely known as a recession-proof asset class. As the most affordable housing option, demand for our homes actually increases during a recession.
In addition, mobile home park residents are known as “sticky residents”, meaning they stay for the long term, rarely moving out of their chosen community.
Other fundamentals to consider are rental and occupancy rates. Rental rates across the MHP space continue to rise. Most MHPs remain at below-market rents,
providing a great deal of room for potential upside in rents.
At the macro level, occupancy rates are at all-time highs. However, at the micro level, there is tremendous opportunity for optimizing occupancy at parks across the country in all markets.
In addition, the recent attention by the administration, FHA, and Freddie Mac on affordable housing, and especially manufactured housing, has opened new avenues for consumers and investors. For example, the Federal Housing Administration proposed a rule to annually adjust the loan limits for its Title I Manufactured Home Loan Program, a program that insures loans used to finance manufactured homes titled as personal property. Other proposed
Savvy investors are looking beyond the static to the fundamentals, and the fundamentals of the market remain strong.
or enacted actions include helping states and localities eliminate needless barriers to affordable housing production, including permitting for manufactured housing communities, and creating separate indexes and updating loan limits for Title I Manufactured Home Loan Program.
There is no doubt that untapped value and opportunity remain in the mobile home park market, and the fundamentals prove it.
For sellers, there is value in what they’ve built. Tapping into that value will open new opportunities.
For investors, there is untapped opportunity in the inherent value of the property.
While this unchartered territory brings uncertainty, one thing is definite, there is plenty of opportunity in uncertainty for mobile home park owners and investors. MHV
Kevan Enger is a partner and manufactured housing director for Capstone MH. He specializes in helping mobile and manufactured home park property owners across the country successfully position, market, and sell their properties to maximize their returns. Capstone has seven offices in five states throughout Florida, the Southeast, Midwest, and Mid-Atlantic.
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