Chicago trailer park owner enters Long Island

By Dow Jones Newswires-Wall Street Journal
Posted Feb. 22 at 6:21 a.m.

One of the nation’s largest owners of trailer parks has quietly entered Long Island with the purchase of a 328-lot property near the Hamptons and the Long Island Sound.

Hometown America Corp., of Chicago, paid nearly $22 million for the 101-acre Thurm’s Estates community in Calverton, about $66,000 per lot. That’s more than double the national average, says Buddy Martin, one of the deal’s brokers.

The high price reflects the limited number of trailer parks in Suffolk County. The county has an estimated 5,000 manufactured residences and new communities are unlikely, reflecting the large number of residents and government officials who consider them an eyesore.

Martin, the associate director of Marcus & Millichap’s national manufactured housing group, says that there rarely are vacancies in Suffolk County’s manufactured home communities. When lots become available, they typically get snapped up, he says.

Nationally, the nation’s roughly 50,000 communities are about 90 percent filled and there’s minimal resident turnover, making them attractive to buyers, even in a depressed market. Brokers say there was strong investor interest in Thurm’s Estates, which has been renamed Calverton Meadows by its new owner. Tenants there must be 55 years or older and the community has an attractive location near the upscale Hamptons.

“There are only so many communities on Eastern Long Island and they’re never for sale,” Martin says.

Hometown America is one of the nation’s largest park owners, operates more than 120 communities in 20 states including Florida, Texas and Michigan. Martin said the seller of the community is Morgan Management LLC, a Pittsford, N.Y.-based real-estate company whose holdings include apartment buildings, self storage and manufactured home communities.

Hometown and Morgan executives didn’t return calls requesting comment.

The manufactured home business, which includes mobile homes well as homes that are built on-site, has been buffeted by the economic downturn and other cross-currents in recent years. During the housing boom, shipments of manufactured homes fell largely because they were harder to finance than regular homes. Lenders considered them riskier because the homeowners may not own the plots where the homes are located. Still, about 19 million people live in manufactured homes, according to the Manufactured Housing Institute trade group. With credit tight for traditional stick-built buyers and many Americans looking for housing alternatives, the trade group thinks the number of residents could climb.

“We are very optimistic that we’re going to be part of a strong housing market recovery and we’ll bounce back sooner than the stick-built guys,” says Executive Vice President Thayer Long.

At Thurm’s Estates, one of eastern Long Island’s largest manufactured housing communities, monthly rent has been about $550, according to Joseph Kummer a resident and president of the Mobile/Manufactured Home Owners Association of Suffolk Inc. Residents pay for electricity, heat and propane separately.

Kummer says his monthly rent increased $50 in January and he’s worried that further annual increases could “force seniors on lower incomes out of their homes.”

Suffolk County’s manufactured-housing communities have long attracted owners looking for an alternative to the region’s expensive homes. A bill in the New York state Legislature would let owners challenge rent increases greater than the Consumer Price Index. Kummer admits the bill faces a “tough road.”

Calverton, a former aircraft and weaponry testing area that still includes long runways, is one of the few Island areas with large undeveloped parcels. Over the years, developers have pitched ideas including a theme park, hotels, an industrial park and a 300-foot ski mountain with artificial snow, says Jack O’Connor, a principal with Newmark Knight Frank’s Long Island office who has marketed the land.

While those ideas haven’t succeeded, it’s unlikely a manufactured-home community would earn any support. “There’s no more land left for a mobile-home park,” Kummer says.

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One comment:

  1. taxpayer Feb. 22 at 9:19 a.m.

    Apparently there are about 333 lots in this 101-acre parcel. Given typical mobile home lot size, there must also be a bunch of vacant land. They paid less than $22,000/acre, which I would guess is a pretty cheap price. However, I’m not familiar with the area, perhaps there’s contamination or other special factors to worry about.