Macroeconomic Highlights

In Q2 2025, macroeconomic conditions remained challenging but showed early signs of stabilization as the Federal Reserve held rates high amid sticky service-sector inflation, with markets anticipating a modest cut later this year; capital markets showed improvement, with the bid ask spread decreasing, yet sector fundamentals proved resilient: manufactured housing REITs delivered strong NOI growth on the back of rent increases, high occupancy, and rental conversions supported by affordability-driven demand; medical office REITs benefited from favorable lease escalations and regulatory momentum from a proposed CMS rule expanding outpatient eligibility, though biotech and lab exposure faced capital pressures; and self-storage REITs posted sequential improvement in rental rates and occupancy after a soft start to the year, with operators leaning on expense control, targeted acquisitions, and portfolio optimization to offset Sunbelt supply pressures – collectively, REIT performance underscored that while high rates and inflationary costs remain headwinds, long-term demand drivers such as constrained housing affordability, demographic growth, and essential service demand continue to provide durable support.

Inflation and the 10-Year Treasury Since 2022

Inflation and the 10-Year Treasury Since 1962

Q2 2025 Manufactured Housing REIT Data Overview

Q2 2025 Manufactured Housing Operating Fundamentals

Manufactured Housing Rental Rates

Equity LifeStyle Properties (ELS) generated 5.8% rate growth in its manufactured housing (MH) portfolio during the second quarter of 2025, reflecting increases to renewing residents and higher market rents paid by new residents after turnover. Core MH base rent growth is projected at 4.9%–5.9% for the full year. Annual RV and marina base rental income, representing more than 70% of RV/marina revenue, rose 3.7% in Q2 and 3.9% year-to-date, with roughly 6% rate growth for both RV and marina portfolios. Sun Communities (SUI) reported MH same-property NOI growth of 7.7% for Q2, supported by rent growth across the segment. Its full-year manufactured housing same-property NOI guidance midpoint was increased to 7.5%. RV same-property revenue grew 0.9% year-over-year in Q2, consistent with its maintained full-year RV same-property NOI guidance midpoint of -1.5%, with transient RV revenue expected to decline ~9% for the year. UMH Properties (UMH) reported same-property rental and related income up 8% year-over-year in Q2, driven by rent increases, higher occupancy, and the addition of rental homes. Year-to-date, same-property rental and related income also rose 8%.

Rent per Site (Same Store)

Manufactured Housing Occupancy

ELS reported MH occupancy above 94% portfolio-wide, with 97% of MH residents as homeowners and average resident tenure of 10 years. Florida, California, and Arizona markets showed continued high demand; in Phoenix/Mesa, 800 homes have been sold over the past 5 years, and 700 development sites added. RV annual sites provide over 70% of core RV revenue, though Q2 annual RV/marina occupancy was impacted by higher attrition at 20 RV properties in the North/Northeast and turnover at two marinas affected by storm damage. SUI’s MH same-property occupancy increased 40 basis points year-over-year to 97.6% in Q2, with rental homes comprising 12% of total MH sites. Transient RV occupancy softness persisted, partly due to annual site conversions. UMH increased same-property occupancy by 76 units sequentially and 251 units year-over-year, ending Q2 with rental home occupancy at 94.4%. It converted 190 homes from inventory to rentals in Q2 and 305 year-to-date, with 145 ready for occupancy, 300 being set up, and 200 on order.

Period Ending Occupancy (Same Store)

Manufactured Housing Income & Expenses

ELS delivered 6.4% core portfolio NOI growth in Q2 versus prior year, 70 basis points above guidance. Core community-based rental income rose 5.5% for both Q2 and year-to-date. Utility and other income rose 4.4% year-to-date, with utility recovery at 48.2%, up 180 basis points year-over-year. Core operating expenses were flat year-over-year in Q2 and up 70 basis points year-to-date, with savings in utilities, payroll, membership expenses, and real estate taxes. SUI achieved 4.9% North American same-property NOI growth in Q2, with MH as the primary driver; RV same-property NOI declined 1.1% as a 0.9% revenue gain was offset by a 3.1% expense increase. U.K. same-property NOI rose 10.2%, with revenue up 9.5% and expenses up 8.8%. Expense savings year-to-date exceeded $17 million, including payroll, utilities, and procurement efficiencies. UMH’s total Q2 revenue increased to $66.6 million from $60.3 million last year, with rental and related income up 9% and sales income up 19% to $10.5 million. Same-property NOI increased 10% year-over-year to $34 million, and the operating expense ratio improved to 38.2% from 39.4%. Community operating expenses rose 7%, mainly from acquisitions and higher payroll, taxes, snow removal, and utilities.

YoY Rental Income Growth (Same Store)

YoY Expense Growth (Same Store)

YoY NOI Growth (Same Store)

Manufactured Housing Investment & Transaction Activity

ELS invested in new home inventory in key markets, selling nearly 700 new homes in Tampa–St. Pete over the last five years and 800 in Phoenix/Mesa, while delivering 1,500 MH sites and 2,900 RV sites across the portfolio over the same period. In Q2, it funded a $56 million loan to an 80%-owned joint venture, repaid $87 million of secured debt, and refinanced via a $240 million unsecured term loan. SUI closed the $5.25 billion sale of Safe Harbor Marinas on April 30 and six delayed-consent properties totaling $137 million in May–June. It repaid $3.3 billion of debt, returned $830 million to shareholders (special distribution and repurchases), and acquired titles to 22 U.K. properties for $199 million. It also identified ~$565 million in MH acquisitions using 1031 proceeds and released $431 million into unrestricted cash. UMH refinanced 10 communities for $101.4 million at 5.855% interest, with appraisals valuing them at $164 million versus a $67 million investment. It acquired four communities totaling 457 sites for $39 million year-to-date, including two Maryland properties (191 lots, 79% occupied) post-quarter. UMH also opened its third Nuveen JV development — 113-site Honey Ridge in Pennsylvania — in June 2025.

Acquisition Dollar Amount History

*Excludes Sun Communities Acquisition of Park Holidays in April 2022 for $1.2 Billion

Manufactured Housing Cap Rates & Bid-Ask Spread

ELS reported current secured debt terms for 10-year loans at 5.25%–6% interest, 60%–75% LTV, and 1.4x–1.6x DSCR, with best terms available for high-quality, age-qualified MH assets. UMH’s Q2 refinancing of 10 communities implied significant value creation, with a $97 million (146%) value increase over cost basis, translating to $82,000 per site appraisals. SUI did not disclose cap rates but noted it is pursuing acquisitions with strong supply-demand dynamics and strategic fit within its MH portfolio.

Implied Cap Rate History

*The implied cap rate data indicates the market value of each REIT.   

The implied capitalization rate is a culmination of the company value and total debt of each company divided by its NOI. 

Enterprise Value History

Headwinds in the Manufactured Housing Market

ELS saw RV/marina occupancy declines from higher attrition in northern markets during renewal periods, turnover at two storm-impacted marinas, seasonal and transient RV rent declines of 5.6% and 8.6% year-to-date, and reduced Canadian seasonal bookings (20% lower early-bird renewals). SUI’s RV same-property NOI declined due to transient softness and expense increases, while transient RV revenue is projected to fall just over 9% for 2025. In the U.K., expenses rose from the national minimum wage increase. UMH faced 7% community operating expense growth from acquisitions and municipal costs, and expects short-term occupancy drops at newly acquired Conowingo Court (142 sites, 101 occupied) during repositioning. Across all three, weather disruptions (ELS noted a cool start to camping season and rain-impacted weekends) and selective market attrition weighed on RV operations.

Tailwinds in the Manufactured Housing Market

ELS benefits from a resident base paying cash for ~95% of home purchases, reducing interest-rate sensitivity, and from strong Sunbelt demand where ~70% of RV annual revenue is concentrated. SUI’s MH occupancy gains, rental home growth (12% of MH sites), and expense discipline drove guidance increases, while its U.K. operations delivered strong NOI growth through higher transient revenue and reduced reliance on home sales. UMH’s vacancy infill potential spans 3,100 vacant lots, 2,300 acres of land, 349 fully entitled lots, 406 completed lots, and 500 lots in the approval process. It also highlighted legislative momentum, such as HUD code changes enabling duplexes, triplexes, quadplexes, and potentially two-story HUD homes, and partnerships like GAF factory-installed solar shingles and batteries. All three reported strong demand trends for affordable community living, bolstered by limited new supply and demographic tailwinds.

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