Blackstone to Buy $550M MHC Portfolio

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Blackstone Group aims to grow its manufactured housing portfolio by acquiring about 40 parks for $550 million, in a major vote of confidence for one of the most resilient commercial property sectors.

The New York-based firm, considered to be the world’s largest commercial landlord, is in exclusive talks to purchase the properties from Summit Communities, according to a Bloomberg account citing people familiar with the matter. Blackstone would acquire the assets through its longer-hold, income-oriented vehicle Blackstone Real Estate Income Trust (BREIT).

Most of the 40 parks are located in Florida. Sun Communities Inc., a real estate investment trust, also bid on the portfolio, according to the report. Blackstone’s prospective deal is not yet final and may fail to materialize.

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A source confirmed to Commercial Property Executive that the deal is in the works and added that the properties will be operated by Treehouse Communities, a top operator with dozens of manufactured housing communities across six states, primarily in the Sunbelt. Blackstone plans to spend tens of millions of dollars upgrading the housing stock and enhancing the common area amenities, such as pools and clubhouses.

Niche asset heats up

The deal would significantly expand Blackstone’s footprint in the manufactured housing space. The alternative asset manager, which has a real estate portfolio valued at $329 billion, is said to have paid roughly $200 million to pick up seven parks from Legacy Communities earlier this year. Most of the parks are located in Florida and Arizona.

In 2018, Blackstone snapped up 14 manufactured housing communities in Arizona and California from Canada-based Tricon Capital Group for $172 million. Even including the new deal with Summit Communities, however, the firm would own less than 1 percent of the existing manufacturing housing stock across the U.S.

With the pandemic aggravating the affordable housing crisis, manufactured housing communities have proven to be both a viable housing alternative and a relatively safe and stable investment option. JLL reported that $821 million worth of manufactured homes traded during the second quarter, up 23 percent compared to the first quarter, even as deal volume slumped across other property sectors.