TPG Capital exploring sale of mobile-home firm Strive Communities

[NEW YORK] Private equity firm TPG Capital is exploring the sale of Strive Communities, an operator of mobile-home parks that could fetch US$750 million or more, according to people with knowledge of the matter.

The firm, working with an adviser, is set to begin soliciting interest from potential suitors in coming weeks, said the people, who requested anonymity because the talks are private. It's possible TPG will decide to keep the business, one of the people said.

A TPG spokesperson declined to comment.

BRIGHT SPOT

The potential sale comes as investors increasingly bet on mobile home parks, making the properties a bright spot at a time when traditional corners of commercial real estate, such as office and retail, are facing pandemic-related headwinds.

TPG's real estate arm owns Colorado-based Strive, which oversees more than 120 communities across 16 states including Texas, Illinois and Iowa.

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Mobile-home parks - also known as manufactured-housing communities - traditionally feature prefabricated homes with nearby common facilities such as pools and recreation halls. The average price of a new manufactured home in the US was US$86,900, according to US Census Bureau data that was last updated in April.

DEALS UP

More than US$800 million worth of mobile-home parks changed hands in the second quarter, up 23 per cent from a year earlier, according to a report from JLL. That came the pandemic-battered commercial real estate market that saw deals plunge 68 per cent to roughly US$45 billion over the same period.

Institutional investors including Blackstone Group, Apollo Global Management and Singapore's sovereign wealth fund GIC have made bets on the manufactured housing sector.

Equity LifeStyle Properties and Sun Communities, two real estate investment trusts with exposure to mobile home parks, have both outperformed the Bloomberg US Reits Index over the past 12 months.

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