In our soon to be published book on Making, Managing and Measuring Value for Real Estate Intensive Businesses, Michelle Gigowski and I identify ten turnaround tips for distressed manufactured housing communities. The first tip is redeploying excess site space into value enhancing amenities.
It is a simple concept, which we have used in a number of consulting cases. Essentially, if the development has excess sites that are unlikely to be absorbed by new tenants in the reasonably near term, turn the excess space into simple, neighborhod enhancing elements like community gardens, playgrounds, and, in the case of one of our projects, a picnic area with a gazebo and large patio like space with fire pits and comfortable seating.
These types of inexpensive changes support current occupancy by managing attrition more effectively, and they directly provide incremental occupancy. Each extra occupied site adds about $15,000 to $20,000 to the value of the average manufactured housing community in the Midwest. It doesn’t take but one or two extra tenants to pay for these improvements. In one case, we saw an 800% return on the vacant site redeployment investment, and it is common to experience 400% to 500% returns.
Bottom line: giving neighbors a reason to become a community is more than just good business.
Fri, January 20, 2012
by Tim Moffit