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22 Million in USA -1 in 15  Live in Trailer Parks - PE Corps buying up the land with low IR's

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22 Million in USA -1 in 15  live in trailer Parks - PE Corps buying up the land they're on

Max Kaiser & Stacey (3.50 in ) 

https://www.rt.com/shows/keiser-report/460423-rent-price-increase-homelessness/

 

https://seekingalpha.com/news/3465365-private-equity-moves-trailer-parks-rents-rise

 

Quote

As private equity moves into trailer parks, rents rise

May 20, 2019 

An opinion piece by Rana Foroohar in the Financial Times notes sharply higher rents at trailer parks are occurring at a time when big private equity firms are increasing their investments in such communities.

In these manufactured-housing communities, residents generally own their homes, but rent the property for the home.

PE funds such as Carlyle Group (CG), Blackstone (BX +0.8%) and Apollo Global Management (APO +0.2%) have increased their activity in the sector, as the industry -- largely consisting of "mom-and-pop"-owned communities -- is ripe for consolidation.

Institutional investors, which also includes such entities big pension and sovereign wealth funds, accounted for 17% of the $4B in sector transactions last year, up from 9% of $1.2B in deals in 2013.

Lot rents on private-equity-owned properties have risen as high as 15% over two years, according to the Center for Impact Finance at the University of New Hampshire.

Meanwhile, tenants who can't afford the higher rent face the choice of either having to pay to move their homes elsewhere -- a costly endeavor -- or abandon their homes, say consumer advocates.

 

Edited by Saving For a Space Ship

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Interesting article on this. In the FT a couple of weeks ago. 

https://www.google.com/amp/s/amp.ft.com/content/7addf0c8-77d6-11e9-be7d-6d846537acab

Standard property investment returns in the US are 2%, but caravan parks can return 4% so PE is piling In.

Some states have laws allowing the owners of the trailers to get first refusal if the site goes up for sale if they club together as a co-op and run it themselves, but many states don't and these are bei g swept up by PE who presumably jack up prices then will eventually flip the land to sell for another purpose at some point. 

There is a similar parallel with houseboats in the UK where moorings are becoming very expensive and families have to move around frequently because they can't secure a permanent mooring. 

http://www.bbc.com/news/magazine-36046323

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Whereas in the Uk, PE   / Blackstones spent billions on railway arches with low IR credit & have massively raised rents (posted on hpc below)

perhaps they plan to stack  trailer parks in london railway arches ? 

Railway arch shops face eviction after rent rises of up to 85% UK businesses from bakers to tattoo parlours at risk after 2018 sale of Network Rail property portfolio

https://www.theguardian.com/business/2019/jun/01/railway-arch-shops-uk-face-eviction-rent-increases-network-rail

Network Rail sells railway arches for £1.5bn to Blackstones - Housing Conversions ?

 

the-stacks.jpg

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2 hours ago, Saving For a Space Ship said:

 

Whereas in the Uk, PE   / Blackstones spent billions on railway arches with low IR credit & have massively raised rents (posted on hpc below)

perhaps they plan to stack  trailer parks in london railway arches ? 

Railway arch shops face eviction after rent rises of up to 85% UK businesses from bakers to tattoo parlours at risk after 2018 sale of Network Rail property portfolio

https://www.theguardian.com/business/2019/jun/01/railway-arch-shops-uk-face-eviction-rent-increases-network-rail

Network Rail sells railway arches for £1.5bn to Blackstones - Housing Conversions ?

 

the-stacks.jpg

Perhaps Blackstones' and others' apparent lack of interest in the equivalent of UK trailer parks is what seem to be tough laws about ground rent increases and evictions. The horror stories that do come to light are the attempts by wide boys to get round the law and intimidate elderly or vulnerable residents before anyone can stop them.

We've been here for almost 20 years with not a hint of a problem and have never lived anywhere better despite the building's limitations. The alternative would have been to come up with some real money but even by 2002 the ship of value was getting ready to sail. We decided against having a mortgage, probably near 6 figures for anything more than a pokey flat.

Sometimes I do wonder if the Tories ever get another decent majority whether they'll change the law to make it easier for them and their friends to clean up in this sector. They're a bit like the aliens in the Independence Day films, scouring the universe for stuff to plunder.

If Blackstones' are such geniuses what do they plan to do if interest rates rise because then the value of their investment must surely fall. Maybe they already know that can never happen or that they will have made enough by then to cover that scenario.

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