Alex Pettee, CFA
Manufactured Housing REITs: Don't Mess With The Best
Manufactured Housing REITs - the best-performing property sector of the past decade – continued their stellar performance in 2021, riding favorable fundamentals of robust rent growth and limited housing supply.
MH REITs edged out the REIT Index on the final day of 2021 to push their remarkable streak of outperformance to nine years, the longest of the Modern REIT Era.
Consistent with the trends across the residential REIT industry, MH REITs have delivered "beat-and-raise" results throughout the year. MH REITs are on pace for remarkable 20% FFO growth this year.
MH REITs are more "bond-like" than most investors expect, however, resulting from the remarkable consistency in delivering mid-single-digit rent growth regardless of the macroeconomic environment.
The secular tailwinds resulting from the intensifying affordable housing shortage should persist into the back half of the 2020s, if not longer. While never "cheap," MH REITs remain an essential component of dividend growth-oriented real estate portfolios.