Canadian Investment Firm Building Upscale Mobile Home Parks In Florida

Bilzin Sumberg
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As ties between Canada and Florida continue to strengthen, Canadian investment in the region continues to increase. Tricon Capital Group, the Canadian company whose profit rose five-fold last year after betting on U.S. housing in the depths of the slump, now plans to expand into upscale mobile home parks in Florida.

Tricon has announced that it is interested in purchasing commodities of manufactured homes in the “sun belt,” which it identified as Arizona, Florida and California. Selling prices in these areas average about $60,800, the cheapest of any U.S. region. The Toronto-based company aims to make its first investment this year, purchasing assets that amount to roughly $750 million.

“If you look at the U.S. population, it’s definitely growing, it’s definitely getting older and it’s probably getting poorer,” said Gary Berman, the COO of Tricon yesterday at the Bloomberg office in Toronto. “What single-family rental and manufactured housing do is they provide very affordable housing for people.”

Tricon has seen 35% gains since it went public in 2010. It’s strategy to purchase, renovate and flip single-family homes in the U.S. after the 2008 financial crisis has allowed them to compete with private equity firms such as Blackstone Group L.P.

The U.S. single-family home market is worth US$2 trillion to US$3 trillion, and manufactured housing is about a US$400 billion business.

Berman is targeting homes that rise above traditional “trailer parks.” According to Berman’s comments in The Financial Post, “there’s a star system,” he said, adding that “If you looked at a one-to-two-star park, you would see trailer parks, you would see RVs. If you looked at a five-star park you wouldn’t know the difference between that and a single-family home. They’re beautiful. That’s what we’re interested in targeting.”

Entering the sector is a natural extension for the company, which profits from purchasing at a low price and selling or renting as values rise.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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