Manufactured Homes, Multifamily REITs Benefit From Housing Trends

2015 mid-year housing report: starts, data, and trends

Sourced through Scoop.it from: blog.forest2market.com

Housing market data emphasized by John Greene from Forest2Market explains why some REIT stocks have recovered over past weeks, following a pullback.

One of the few well-performing REITs of the year has been the manufactured homes sector. Growing numbers of baby boomers have reached retirement age. The lowered vacancy rate and increased rents have made them look at alternatives so they are seeking affordable housing, such as provided by manufactured homes. Overall, manufactured home REIT stocks have increased 12 percent. Two highlights have been Equity LifeStyle Properties (NYSE:ELS) and Sun Communities (NYSE:SUI).

In addition, a trend towards multifamily building has benefited Multifamily REITs. For instance, Camden Property Trust (NYSE:CPT) has enjoyed strong growth in same-property new lease or renewal rates and occupancy. Millennials have preferred to rent apartments and wait longer to start families and buy homes, possibly due to financial constraints or for prioritizing experience over possessions.

Other Multifamily REITs such as UDR (NYSE:UDR) and Essex Property Trust (NYSE:ESS) have experienced the same trend. However, they have faced more severity because they have greater exposure to the West Coast, where the gap between supply and demand has been wider. For example, UDR’s portfolio occupancy in the second quarter of 2015 was 97 percent. New leases and lease renewals rose more than seven percent compared to the same period last year. Essex Property has had similar strong results.

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Written by Heli Brecailo

Disclaimer: This newsletter is not engaged in rendering tax, accounting, or other professional advice through this publication. No statement in this issue is to be construed as a recommendation to buy or sell any security or other investment. Please do your own due diligence before making any investment decision. Some information presented in this publication has been obtained from third-party sources considered to be reliable. Sources are not required to make representations as to the accuracy of the information, however, and consequently the publisher cannot guarantee accuracy.

Disclosure: The author has no positions in any shares mentioned, and no plans to initiate any positions within the next 72 hours.​

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