Archive for August 11th, 2013

Meetings $ & # Expose’, IPOs, & ‘DENSITY’

Sunday, August 11th, 2013

Blog # 258 Copyright 2013 11 August 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities, & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’

Purpose of this blog. ‘To be a national Advocacy voice, statistical Research reporter, & communications Resource for LLLCommunities, of all sizes, throughout North America!

I.

Anticipation Passion may be in the $s,
But Participation Proof is in the #s!

II.

IPO Time Once Again
for Land Lease Lifestyle Community Portfolios?

III.

IF NO MORE CHATTEL CAPITAL. WHAT’S NEXT?

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I.

Anticipation Passion may be in the $s,
But Participation Proof is in the #s!

Amount of event registration fees and hotel overnight room rates oft predict, even presage (i.e. ‘give a warning of’) potential attendance at manufactured housing and land lease lifestyle community (a.k.a. manufactured home community) trade events and meetings. The 2013 Fall lineup of 16 national and regional gatherings, between 5 August & 5 November, offers a unique look into the near future, relative to participation level meeting planners and hosts might expect, based on 1) announced registration fees, 2) hotel overnight rack rates, and 3) past attendance numbers at like events.

For a complete list of the aforementioned 16 national and regional meetings, along with contact information, visit community-investor.com. Left click on the blog icon, then scroll back to blog # 257 and read the list therein.

For a comprehensive list of state MHAssociation meetings and training sessions, visit mhi.org. Left click on CALENDAR, but do NOT expect to find the aforementioned national and regional events listed there; e.g. NO RV/MH Hall of Fame Induction Banquet, NO 22nd annual Networking Roundtable, NO 3rd annual SECO Symposium, NO MHM® training & certification, NOT even ULI’s MHCC meeting! Why the omissions? It’s not like MHI didn’t receive Press Releases at least some of these ‘other events’. If you’re an MHI member, Ask WHY?! The institute either represents all segments of the manufactured housing industry or it doesn’t.

OK, let’s ‘run the $s & #s for four of what might be the biggest, most important national and regional meetings this Fall, where the HUD – Code manufactured housing industry and LLLCommunity real estate asset class are concerned.

• 22nd International Networking Roundtable for LLLCommunity owners/operators, 18 – 20 September, in Bloomingdale, IL. Registration is $395.00 for LLLCommunity owners/operators; resort hotel room rate X two nights = $278.00; and add $100.00 for ‘taxes, fees, miscellaneous’, for an event total of approximately $773.00, plus travel expenses. Last year’s attendance = 240 LLLCommunity owners/operators & their preferred lenders.

• MHI’s annual meeting, including the National Communities Council, 29 September – 1 October, in Carlsbad, CA. Registration is $399.00 for MHI members; resort hotel room rate X two nights = $438.00; and add $100.00 for ‘taxes, fees, miscellaneous’, for an event total of approximately $937.00, plus travel expenses. Last year’s attendance = slightly fewer than 100 MHI members, including only a dozen or so NCC members.

• 3rd annual SECO Symposium, 8 – 10 October, in Forsythe, GA. Registration is only $195.00 for LLLCommunity owners/operators; resort hotel room rate X two nights = $120.00; and add $100.00 for ‘taxes, fees, miscellaneous’, for an event total of approximately $415.00, plus travel expenses. Last year’s attendance = 142 paid registrants.

• 1st National Communities Council Leadership Forum, 16 – 18 October, in downtown Chicago. Registration is $549.00 for NCC members; downtown hotel room rate X two nights = $578.00; and add $100.00 for ‘taxes, fees, miscellaneous’, for an event total of approximately $1,227.00, plus travel expenses. No historical precedent for attendance estimate.

In summary; and given the accuracy of announced registration fees and quoted hotel rack rates, it appears the bottom line ‘per person’ cost to attend each of these four regional/national two day meetings, ranges from a LOW of only $415.00/person at the 3rd annual SECO Symposium in GA; to $773.00/per person at the 22nd annual International Networking Roundtable in IL; to $937.00/person at MHI’s annual meeting in CA; to a HIGH of $1,227/person, at the National Communities Council Leadership Forum in Chicago, IL. – or, in the latter instance, nearly triple what it’ll cost a LLLCommunity owner/operator to patronize the SECO event – where there’ll be six new HUD – Code homes on display!

Tried, albeit unsuccessfully, to resist commenting on the perennial problem of ‘high cost national meetings’ throughout the manufactured housing arena. Know what this wide range of meeting costs suggest (to me)? Someone at the national advocacy level is either 1) insensitive to the difficult economic times member companies and state MHAssociations suffer at present; OR, 2) are well aware of the matter, but also clearly realize how high meeting costs 1) Discourage Participation by anyone other than a few loyal and financially flush businessmen and women, along with high – salaried executives, all who write – off these meeting and hotel fees as deductible business expenses; and 2) Enable & Enhance ‘trade politic control’ for the few who do attend, often at the expense of peers who can’t or won’t waste the money! This is a situation that begs fixing, the sooner the better….

So, is this a new national advocacy association phenomenon? NO; it’s been the manufactured housing industry’s sorry, self – serving reality for decades!

II.

IPO Time Once Again
for Land Lease Lifestyle Community Portfolios?

Following quotes taken directly from the USA Today newspaper; ironically, on the same day the RV/MH Heritage Foundation hosted its’ annual Hall of Fame Induction Banquet, 5 August, in Elkhart, IN. Were YOU one of the 320 recreational vehicle and manufactured housing pioneers and businessmen and women present for this impressive soiree?

Title of the article lead in section B: ‘IPOs are back on the street’

“The world may not be ready for another dot-com boom, but Wall Street is definitely warming up to IPOs again.” (IPO = Initial Public Offering of a firm’s stock to the investing public)

“Companies are lining up to sell shares to the public for the first time, signaling the long – awaited reawakening of the market for initial public offerings might be happening.”

“It’s a strong year for the IPO market”, says Josef Schuster of IPOX Schuster. “It’s the best environment since the mid – 1990s for good companies. It’s amazing.”

FYI. The mid – 1990s, is when three (present day) real estate investment trusts, or REITs, were formed: ELS, Inc., (then MHC, Inc.), Chateau Communities, Inc. (now gone), and Sun Communities, Inc. UMH Properties (then United Mobile Homes) is not included in ‘the three’, as it became a REIT back in the 1980s, during the first such wave. Source of this REIT information? The 24th annual ALLEN REPORT, a.k.a. ‘Who’s Who Among Portfolio Owners/operators of Land Lease Lifestyle Communities (a.k.a. manufactured home communities), available for $500.00/copy from PMN Publishing via the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. OR, for FREE, when subscribing to the Allen Letter professional journal for only $134.95/year (12 monthly issues).

“The clip of IPOs this year is already on the verge of blowing away recent deal activity. There have been 116 IPOs this year, up 35% from this time last year. The number of IPOs is just about to pass the 128 done in all of 2012, and 125 in all of 2011.”

Three reasons, cited by the USA Today article, as to why the IPO market is finally showing signs of life:

The rising broad stock market

The Facebook effect. (After initially spooking investors, Facebook stock has rebounded.)

Strong performance of recent deals.

The article concludes with this warning: “You have to be selective and not just go in and think guaranteed returns.”

Well, with the foregoing in mind, this industry observer reached out to the four large LLLCommunity portfolio owners/operators rumored to be ‘growing & positioning themselves to go public’ in the near future with their own IPOs. Not unexpectedly, there were no replies. But then, that in itself, might be viewed ‘as a reply’. Hmm.

What do YOU think? Are we ready for more REITs in the LLLCommunity real estate asset class? Some would surely say YES to the broadened investment opportunity scenario. Others however, a resounding NO, recalling the out of whack (i.e. ‘out of sync with rent rates of other multifamily rental housing types in the same local housing markets) rental homesite rent rates laid at the feet of REITs formed during the aforesaid ‘second wave’ in the mid – 1990s. Proof? Recall the short – lived REITs now out of the business. See last page of 24th ALLEN REPORT for ‘name & number’ details.

And are we ready to have Wall Street analysts, once again, view our unique, income – producing property type as ‘growth stocks’ (expecting firms to pay a dividend every quarter, as opposed to reinvesting retained earnings for capital projects), rather than ‘value stocks’?

Whatever the case, when the new IPOs start rolling out; remember, you read about it here first!

III.

IF NO MORE CHATTEL CAPITAL. WHAT’S NEXT?

Though it genuinely pains me to say so, with each passing day and waning week, it’s looking more and more like the days of chattel capital financing new and resale homes in land lease lifestyle communities, as we’ve known it for decades, have come to an end. If TRUE, what is next?

Well, just this week, an email message crossed the PCs and desks of some owners/operators announcing the arrival of DENSITY, a.k.a. Legiance’s ‘Game Changer’. DENSITY? It’s an acronym for Develop Every Non – producing Site, Increasing Total Yield! Seriously.

Specifically and according to Dennis Duling, VP at Legiance Investments, Inc., DENSITY is a program “…for any (LLLCommunity) owner who has a community with high vacancy and limited capital.” The program’s sponsor will “…bring significant private capital (i.e. $1 – 10 million) to a community to: 1) renovate vacant homes, if appropriate; 2) bring in new homes to fill empty sites; and, 3) improve infrastructure where needed. In exchange, at the end of a period of two to three years, the community is sold or refinanced in order to cash out our investor(s) and allow Legiance, the investor, and the community owner, to share in the upside.” The deal can be structured as a joint venture or an outright purchase by Legiance. The firm is also agreeable to taking an equity stake in the community in lieu of a complete cash out from a ‘refi’ (refinance).

To be considered for the program, the LLLCommunity must be ‘C’ grade (or some would say 3 Star) or better, contain 60 – 200 rentable homesites, charge a minimum site rent rate of $275.00, have a vacancy level of 30 – 50%, and be able to document ‘solid demand’ in the local housing market.

OK, all that’s kinda the Good News. But keep in mind, this is a new $ program, likely with kinks to be worked out during the days ahead, relative to terminology, methodology, definitions, cited data, and more. If, however, you’re interested in learning more, contact Dennis Duling via (626) 653-2728. NOTE. The preceding is not to be taken as an endorsement of this or any other particular $ program, at this time. GFA

And know what? DENSITY is not the only NEW Program out and about these days. There are at least three HUD – Code manufactured housing factory cooperative home finance programs afoot, as well as budding interest in various manifestations of online crowd funding, and more. That’s why you need to plan NOW to participate in the 22nd annual International Networking Roundtable, 18 – 20 September, in Bloomingdale, IL. WHY? Well, Friday morning, immediately following the ‘always popular & heavily attended’ real estate lenders (loan originators) panel, there’ll be another group participation presentation, led by the most analytical LLLCommunity owner I know, focused on ‘What remains of the chattel capital market & beyond!’ YOU will not find a comparable program, anywhere, anytime, in the U.S. the rest of this year, and well into year 2014! Why? Because no one else is bold enough to take this sensitive, multifaceted subject on, in your behalf!

So, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 today to get Roundtable information and or to register. Also visit community-investor.com online. For specific questions, reach GFA via (317) 346-7156.

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George Allen, CPM & MHM
Box # 47024, Indpls, IN. 46247
(317) 346-7156