Drake Real Estate Partners Closes $515M Fund
The main residential component of the investment vehicle will be manufactured housing.
Drake Real Estate Partners has closed its fifth flagship fund, with more than $515 million in commitments. The fund will target niche subsectors within the residential and industrial sectors, particularly manufactured housing and industrial outdoor storage.
Dubbed Drake Real Estate Partners Fund V, the vehicle had an initial target of $500 million, the company’s investor base being predominantly in the U.S. The fundraising period spanned a year and a half, and allowed the company to strengthen its partnerships across the country, while also building new ones in Europe, the Middle East, Asia and Latin America.
READ ALSO: Manufactured Housing Trends
Founded in 2012, Drake Real Estate Partners focuses on niche real estate sectors such as manufactured housing, industrial outdoor storage and small bay industrial. Opportunistically, Drake also purchases more traditional property types such as multifamily and data centers.
DREP Fund V’s residential component consists of manufactured housing, with Drake Real Estate Partners owning the assets and leasing the lots beneath the residents’ mobile homes. This allows the company to access a niche sector with a consistent imbalance between supply and demand, where new manufactured housing development is still rare even as rental demand and housing shortage remain strong.
With Latin American roots, the company expanded into the U.S. and adopted a value-add approach by purchasing, repositioning and leasing real estate assets. Predominantly focusing on transactions ranging between $5 million and $25 million in equity, Drake Real Estate Partners picks up its assets from long-term and non-institutional owners and turns them into improved and attractive portfolios for prospective buyers or investors.
MHC’s appeal
Manufactured housing’s robust fundamentals have been consistently attracting new institutional investors and REITs over the past decade. The appeal of this sector as an investment opportunity includes its alignment with affordable and senior housing demand, as well as its land-lease model that allows operators to limit capital expenditures.
Since the start of the year, several entities have announced investment funds that target manufactured housing communities. GMF Group, for example, closed a nearly $250 million fund aimed at purchasing such assets in the U.S.
