Tuesday, October 15, 2013

Carlyle Exits Apartments, Buys Trailer Parks

WSJ reported The Carlyle Group will acquire two trailer parks from Shamrock Holdings LLC.  The parks are in Florida.

Analysts said the deal is evidence that big investors are betting that the demand for low-cost manufactured housing, the latest generation of trailers or mobile homes, will rise as other housing alternatives become too expensive for a number of Americans, especially senior citizens.

This comes after Carlyle said it would reduce its apartment real estate investments.  Bloomberg reported:

Carlyle Group LP (CG), the private-equity firm with more than a third of its $2.3 billion U.S. real estate fund in apartments, is reducing holdings of multifamily housing as rent growth slows from a post-recession surge.

The company is considering apartment sales as rising construction reduces multifamily shortages and price gains for rental properties make them less attractive for private-equity firms that seek returns of 20 percent or more, said Robert Stuckey, the Washington-based firm’s head of U.S. real estate investing. Carlyle has invested or committed about $800 million of equity in 61 multifamily properties since the start of 2011, he said.
Trailer parks, rented by senior citizens, is the place for returns of 20% or more.  Who won't Carlyle take advantage of in their greed quest?  Private equity underwriters did their part to grow America's trailer parks.