Sam Zell is one of, if not the world’s largest investor in mobile home parks. How has this served him? What is his approach? What does the investing legend see ahead for the market?
Founder of Equity Lifestyle Properties (ELS), Sam Zell is recognized as leading the most significant manufactured home community operator, as well as the largest apartment REIT, and a leading office REIT. According to Forbes, Zell is one of the world’s richest individuals with a net worth of almost $5B as of March 2015. Zell is a well-known philanthropist, and former owner of the Chicago Cubs, and several other companies, including Equity Office Properties which sold for a record $39B to Blackstone.
Zell on Real Estate Investing
In mid-December 2015 Sam Zell appeared on Bloomberg to discuss global economic trends, and investing. On his success in the manufactured home arena Zell honed in on the fixed supply factor, saying “it’s very simple. We are not building any more manufactured housing communities. Not in my backyard.” and “therefore demand is increasing, the supply is limited.” Due to this equation Zell adds “I don’t know of any stock or any company that I’m involved with that has a better prospect than Equity LifeStyle.”
The Future for Mobile Home Park Investors
Additional factors that Zell brought up which should continue to boost the profitability of this asset class include the new Fed rate hike, foreign currency and economic issues, and the potential for a new recession ahead.
So far Zell’s ELS has been in the business for over 30 years, and has grown its portfolio to over 370 communities strong, with nearly 140,000 sites under management. Equity Lifestyle credits its success with effective management, elevating the reputation of manufactured housing, and providing better service to residents.
Multibillionaire Warren Buffett is also one of the world’s most notable mobile home investors who also engages the industry from the manufacturing and lending side. Buffett shows no signs of letting go of his portfolio, and has only increased Berkshire Hathaway’s and his own personal real estate investments over the last few years.
While often overlooked, mobile home park investing clearly appears to have played a major role in creating some of the biggest fortunes and wealthiest individuals in America, and the world. These investors remain bullish on these assets and their future potential. Current conditions appear to be attractive for individual investors to move into this niche. Their future success may be augmented by adopting some of the best practices of their billionaire predecessors such as; focusing on superior management, and better customer service.