PGIM Arranges $178M Refi for MHC Portfolio

The five properties are located in Massachusetts, New Jersey, Illinois and Florida.
Photo by Matthew Ball on Unsplash

PGIM Real Estate has arranged $178 million in fixed-rate debt on behalf of its core debt strategy to Hometown America. The fixed-rate debt is going toward the refinancing of the company’s five-property manufactured housing portfolio. The properties are located in the states of Massachusetts, New Jersey, Illinois and Florida.

All properties are stabilized. The five communities, which are made up of a total of 1,731 sites, feature an average occupancy of more than 99 percent. Four of the five communities are age-restricted properties. Bocce ball courts are among the high-end amenities offered at the portfolio’s properties.

Trent Brown, executive director at PGIM Real Estate, led the origination endeavor on behalf of the firm.

Trending upward

In a statement, PGIM officials observed manufactured housing has increasingly provided renters with a cost-effective housing option. Moreover, manufactured housing delivers to investors stable cash flow across all market cycles. Company officials added that this portfolio in particular offers the advantage of recent renovations across its communities. It will also benefit from the positive demographic trend of aging populations in each of the four market areas comprising the portfolio.

Valuations in the manufactured housing sector have continued to trend upward since the pandemic’s start. Some view the sector as providing one potential solution to the nation’s affordable housing crisis. With its assembly-line production, economies of scale and waste reduction, the sector offers a more cost-effective way to produce housing.

Charlie Williams, executive vice president of Bellwether Enterprise, brokered the transaction. Last month, Capstone closed the sale of Parkway Village, a 218-site manufactured home community in Nederland, Texas, that had not changed hands in nearly three decades.