May 31, 2023
 min read

The Case for Modular Home Communities

Manufactured Home Communities represent a large U.S. real estate asset class. It has been one of the best performing asset classes over last 7 years.



Manufactured Home Communities (ManHC’s) represent a large U.S. real estate asset class. For example, real estate luminary Sam Zell is Chairman of the $16.5B AUM Equity LifeStyle Properties REIT (NYSE:ELS) which focuses on ManHC’s.

ManHC’s have been around for decades. ManHC’s housing units are built according to uniform standards established by the Department of Housing and Urban Development (HUD). This is in contrast to on-site, ground-up residential housing developments which are governed by local building codes, which vary from jurisdiction to jurisdiction.

ManHC’s are one of a dozen or so real estate asset classes tracked by real estate research firm Green Street. Here are some recent Green Street research highlights (published March / April 2023):

1. ManHC’s = best performing asset class over last 7 years, more than doubling in value.

Green Street’s “Commercial Property Price Index” (CPPI) published March 6, 2023

2. ManHC’s have the highest forecasted annual Net Operating Income (NOI) growth rate.

Green Street forecasts an annual NOI growth rate of above 3%, highest among all asset classes

3. ManHC’s have lowest forecasted supply growth.

Virtually no new product in development pipeline (“0.0%”)

4. ManHC’s trade at very low cap rates

ManHC’s are one of the most attractive real estate asset classes from a pricing perspective.

5. High Earnings (FFO) Multiple

Back to Sam Zell’s ELS REIT: The public market’s pricing of NYSE-listed REITs is a reflection of a REIT’s earnings multiple (share price / earnings, in the form of Funds from Operations (FFO)). A high earnings multiple manifests public market enthusiasm for the company and its growth prospects.  Among 150 public REITs as of March 31, 2023, the average earnings multiple was 16x. The earnings multiple for ELS was 23x, a top-5 placement among these 150 NYSE-listed REITs.

In summary, ManHC’s have outperformed all other real estate asset classes over the past 7 years, is forecasted to have the highest NOI growth going forward, and has extremely limited new supply.

This is a perfect storm, in the absolute best sense of the term.


Elevate Money via its Future of Housing Fund (FOHF) REIT is going to leverage the Boxabl phenomenon to create a new subset of off-site developed housing units called “Modular Home Communities” (ModHC’s).  While ManHC’s might be regarded as “exit-level” housing, our ModHC’s will focus on entry-level housing. We intend to include a rent-to-own option within our ModHC’s, creating a low-cost first-time home buying opportunity for our customers. FOHF REIT revenue sources include ground rent, Boxabl Casita rent, and interest (to the extent we provide acquisition financing for Casitas dwellers who opt to purchase their home).

The opportunity to mass-produce modular housing is the game-changer. Until Boxabl, this had never been done before. And consequently, the opportunity to create a new real estate asset class is likewise a game-changer. We have a first-mover advantage. And given the compelling dynamics within the ManHC space (high NOI growth, limited new supply), we are in a very attractive place.

Modular homes, including the Boxabl Casita are held to the same local, state and regional building codes required for on-site homes, which indicates superior construction and durability as compared to manufactured homes. The customer is buying or leasing a superior product when they purchase or rent a Boxabl Home.

Consequently, a true value-add is the ability to stack one Boxabl Casita on top of another. So, for the same dirt footprint, you can double the housing unit’s square footage. You cannot stack ManHC’s on top of each other, they are constructed to generally lower HUD standards.

Can you guess which of the three little pigs purchased a Boxabl Casita, versus a manufactured home?

Harold Hofer is a Co-Founder and CEO of Elevate Money.

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