New York

REAL estate investors have turned to single-family rental homes, warehouses and even movie studios, while the pandemic makes it harder to put capital to work in more traditional types of commercial property.

Mobile-home parks are also getting a look.

More than US$800 million worth of the parks changed hands in the second quarter, up 23 per cent from a year earlier, showed a report by commercial real estate firm JLL. Total commercial-property purchases declined 68 per cent to roughly US$45 billion in the same period.

Institutional investors accounted for 28 per cent of mobile-home park purchases, the highest share since JLL started tracking the asset in 2010. Valuations - based on the price investors pay for sites that are leased to mobile-home owners - increased 26 per cent from the second quarter of 2019.

The parks are attracting new interest while Covid-19 hammers prospects for hotels, shopping malls and other commercial-property types. Institutions are also drawn to opportunity to consolidate and upgrade assets owned by smaller investors, said Scott Belsky, who leads the manufactured-housing practice at JLL.

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Residents at the parks typically own their homes but lease the ground they are on. Those rents help generate stable returns for investors, Mr Belsky said. BLOOMBERG