Blackstone Affirms The Brilliance Of The Mobile Home Park Business Model

Blackstone – one of America’s largest private equity groups – has announced that they are buying around 40 properties from Summit Communities, expanding their foot print in Florida and Arizona and significantly increasing their mobile home park holdings. In so doing, they are continuing the love affair that institutional investors are having with the mobile home park industry and its brilliant business model. Why have they become big fans?

A contrarian hedge

The article sums it all up in one sentence:

“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.”

Essentially, mobile home parks have the unique trait that they actually grow stronger in times of economic collapse. With the economic future of America in question, mobile home parks are perfectly positioned to harness the power of a declining U.S. economy.

A proven performer

Mobile home parks’ superior performance is not a matter of conjecture but based on the actual statistics from both the 2007 Great Recession as well as the new pandemic. This is also summed up in a single sentence from the article:

“It is 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.”

At a time in which roughly 30% of all hotel properties are facing foreclosure and the retail, office and industrial sectors are on equally shaky ground, mobile home parks have stood out as the only real estate business model that is still working successfully.

The highest returns in real estate

Of course, one reason for the sudden surge in respect in mobile home parks is the simple fact that they have the highest yields in real estate – and that’s even before the new revelation that they appear to be free from Covid-19 issues. Cap rates on mobile home parks have always been superior to apartments and other real estate factors, mainly due to the false stereotype on the industry advanced by the media for decades (8-Mile, Trailer Park Boys, COPs, etc.). Blackstone is all about profits and mobile home parks share that sentiment.

The biggest “moat” in the U.S.

The big reason why mobile home parks have been able to maintain a sizable lead in desirability over all other real estate sectors is our incredibly vast and favorable “moat” – the word Warren Buffett uses to describe the necessity to keep your business model free from adverse competition. Cities hate mobile home parks and simply will not allow new zoning for them. As a result, there has been virtually no new mobile home park construction in the U.S. over the past half-century, while you can build new apartments, self-storage, retail, office and industrial properties virtually anywhere you want. This absence of new competition has made all mobile home parks unique and precious and free from the ills of over-building that have plagued the other real estate niches nationwide.


Blackstone is only the latest large private equity group to embrace the mobile home park business model. They are joining the ranks of the Carlyle Group (America’s largest private equity group) and Apollo, and many more in the future. Their support for the industry should remind all investors of the great future ahead for this sector.

Frank Rolfe
Frank Rolfe has been an investor in mobile home parks for almost 30 years, and has owned and operated hundreds of mobile home parks during that time. He is currently ranked, with his partner Dave Reynolds, as the 5th largest mobile home park owner in the U.S., with around 20,000 lots spread out over 25 states. Along the way, Frank began writing about the industry, and his books, coupled with those of his partner Dave Reynolds, evolved into a course and boot camp on mobile home park investing that has become the leader in this niche of commercial real estate.