Before describing the allegedly pending billion-dollar MHC deal, let me express the reason to discuss this at all. Manufactured housing is on a four year new home shipment incline, but we are still at historically low levels. As the Wisconsin Housing Alliance (WHA) Executive Director, Ross Kinzler, noted near the close of the Federated States division discussion at the 2014 MHI Summer Meeting, there is a lack of a unifying strategic vision in our industry.
Kinzler, a respected, award-winning state executive who announced plans to retire in about 18 months, publicly hit a theme discussed during meetings, meals and drinks.
Are we going to settle for the status quo? Or will we seize the rising tide and various opportunities to leap ahead?
Ross encouraged consideration of the thoughts described by Rick Rand in this popular OpEd.
Chris Fisher, industry savvy economist at Ducker Worldwide, hit similar themes about Manufactured Housing's potential to leap ahead in a video interview, linked here. Fisher says billion dollar opportunities are many, but we must be willing to invest to capitalize on them.
Billions in capital is chasing manufactured housing, but today, are we ideally positioned to receive it?
If we were engaged in strategic planning as Ross suggested, would we routinely see such 'deals' not just discussed, but actually taking place?
Wouldn't we see more new developments?
Would we see other kinds of major investments taking place? Wouldn't profits go skyward?
Against that discussion backdrop, let's take a quick look at the topic of Canadian cash peering at the U.S..
The Billion Dollar Deal?
First, we know with certainty that Canadian dollars are seriously targeting the U.S. manufactured housing market. We will refer to a previously published article – one of several – for those not up to speed or who want a refresher on this topic.
So the potential for such a billion +/- acquisition described below is not some mere fantasy! At a bare minimum, the reality is that:
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our MHC asset class has performance and strong appeal,
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there are a limited numbers of properties available and
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as one broker told us, in this environment, virtually any property can be seen as being on the market and theoretically up for sale.
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MHC owners and association executives are saying they may receive multiple inquiries per week from those seeking a portfolio, or even an individual property.
Against such a market-heated backdrop, numerous sources from both sides of the border have told MHProNews that a purchase by a Canadian firm is pending for a U.S. commercial real estate portfolio that includes a number of land lease manufactured home communities (MHCs). Numbers being floated in discussions ranged from $900 million and ran north of a billion.
While two particular MHC operations – one Canadian, the other, U.S. based – are the focus of these allegations, there is a notable problem with the rumors.
MHProNews has spoken to executives at both (the alleged) Canadian buyer and the U.S. seller; both sides have formally denied the 'deal' is even being discussed, much less, happening.
A third party source commented, on condition of anonymity, saying "an NDA is in place" that keeps the Canadian – U.S. parties from commenting or confirming the allegedly pending transaction.
Indeed, while not specifically verifying this specific 'pending deal,' a knowledgeable, high level source told the Masthead an NDA would be common practice for such a mega-deal.
While an NDA looks like a logical reason for the alleged parties to deny such a deal, sound reasons were offered privately that point to this specific, oft-repeated “deal” as being unfounded.
Therefore, we aren't even going to mention the corporate names of the alleged 'parties,' to save both operations all the possible head-aches of repeatedly answering questions – internally and externally – about a non-deal.
Are there Take-Aways from this?
We think there are takeaways, but perhaps not the ones some think. Let's ask some questions.
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Why are there so few MHCs being developed? Jim Clayton joked about that in his interview with us.
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While the Boston Globe touts the value of using manufactured homes in their city, why are we seeing so little urban use of MH?
Ross and others are correct. We don't just lack the proper image, we lack a strategic vision.
We must get to the root-cause of basic issues.
After listening to Ross, another executive told me privately about a similar concept they had and acted upon some years ago. They held a two day strategic planning session with industry leaders in their group, created from that broad dialogue an agenda which they then worked on successfully for years.
Division Discussion
In the Suppliers Division, we witnessed discussion of why recruitment efforts have been moribund. Your scribe proposed the notion (repeating ideas your I've heard from others) that associations are about PEP. Protect. Educate. Promote. We get plenty of education on the protection and action needed on Dodd-Frank, and its critical. We get education on other topics. But if associations – not just MHI, which was the topic of discussion, but all associations – turned their value proposition into something so powerful, would we have recruitment discussions at all?
Joining an association ought to include such a powerful promotional element that it literally pays to join! We are all-too-often missing that last P in PEP.
For some 40 minutes in the Supplier's Division, one of the most robust dialogues we've had took place, about boosting the Educational and Promotional aspects of what MHI does, from the perspective of the Supplier's Division. That discussion spilled into dinner, drinks and other conversations.
A Trillion Dollar Industry!
Housing in the U.S. is a trillion dollar annual market. MH is a solution for eco-quality living that makes sense. So why are we hovering around 8% versus the historic 21% or levels previously as high as 33% or more in some areas and eras?
Let's get a great dialogue going, and then move discussion, to planning, to action and profits. We have tremendous opportunities to grow. Let's make it so.
When we do, we'll start to see more greenfield developments, more urban projects using MH as well as far more billion dollar deals that become reality, the real ones like that noted in the column linked above, unlike the rumored one that launched the topic for this column. ##
(Photo credit: Canada-U.S. Peace Arch, WikiCommons, others MHProNews or as shown.)
L. A. 'Tony' Kovach ManufacturedHomeLivingNews.com | MHProNews.com | Business and Public Marketing & Ads: B2B | B2C Websites, Contract Marketing & Sales Training, Consulting, Speaking: MHC-MD.com | LATonyKovach.com | Office 863-213-4090 Connect on LinkedIN: http://www.linkedin.com/in/latonykovach
