Manufactured housing communities (MHCs) have emerged as an institutional asset class, offering attractive yields and defensive characteristics in a housing-short market.
Sector Strengths
- Affordable housing alternative with strong demand
- Residents own homes, creating long-term tenancy
- Limited new supply due to zoning restrictions
- Operating expense ratios lower than apartments
Value Creation
MHC value creation comes from rent increases to market rates, infill development of vacant pads, and operational improvements. Utility billing recapture is a common strategy.