Chicago-based REIT Equity Lifestyle Properties Expands Three Communities in Arizona, Texas
Equity LifeStyle Properties is expanding in interesting ways, bringing more manufactured homes to RV properties in a fashion that creates a destination lifecycle for customers.
The company has more than 400 properties with nearly 154,000 sites across the country. With that, Equity LifeStyles owns one of the nation’s largest networks of real estate.
While ELS has a near-equal mix of manufactured housing communities and RV resorts/campgrounds, it is currently leading the trend of blending the two models into a single community.
Ron Bunce, senior vice president for 150 ELS properties in the company’s western markets, oversees several blended communities. Included in his territory are three properties in Texas and Arizona currently undergoing this type of mixed property expansion.
“What we continue to see from our RV customer is an interest in staying connected to their destination property and the relationships they have built there,” Bunce said. “Traveling by RV and managing multiple destinations can become challenging, leading many to prefer the conveniences of a manufactured home in the resort they previously enjoyed in their RV.”
Chicago-based Equity LifeStyle Properties became a public company in 1993. At the time, it had a portfolio of 41 manufactured home communities. For many years, the company’s core business consisted of retirement communities in Sunbelt destinations. Yet, through extensive property acquisitions during the recent 15 years, ELS entered the RV business, a property type that continues to be a valuable component of the company’s operations.
Fortunately, the addition of RV appears a natural fit for the company.
“The business models of MH communities and RV communities are very similar,” Bunce said. “We saw it as a logical combination of property types because they are operationally similar, as is our customer base among the communities.”
The Expanding Properties
ELS purchased a pair of Mesa, Ariz., RV resorts in 2004 from separate owners. Both properties are in the midst of expansion projects, bringing a sizable MH component to each of the resorts.
ViewPoint RV and Golf Resort has a mix of more than 2,000 sites that hold RV, park models and manufactured homes.
“Our expansion project at ViewPoint has added 235 manufactured home sites so far, with another 200 planned,” Bunce said. “It’s a unique community in that it features 27 holes of golf. We have an 18-hole championship golf course, with an additional 9-hole executive par-3 course.”
ViewPoint also offers the resort-style amenities you might expect: swimming pools, tennis club and softball fields.
“We have softball players ranging in age from 55 to 90, including some in their 80s who throw a mean fastball. It is truly something impressive,” Bunce said.
“There are hundreds of people in the tennis club, and we have great pickle ball courts and a fitness center,” he said. “There are 50 different club and hobbyist groups at ViewPoint. That’s why our customers either come back year after year or decide to stay for good. They want to socialize, have fun and be creative.”
Monte Vista Village Resort
The other ELS expansion property in Mesa, Ariz., is Monte Vista Village Resort. It is a community with nearly 950 sites, including 115 manufactured housing expansion sites.
“Our target customer is the retiree or Baby Boomer group,” Bunce said. “And we found that a 1,300-square-foot, 2- or 3-bedroom home appeals to that buyer. Many will spend the winter months with us, and some will decide to stay year round.
“Traditionally, our customers have been in a time in their lives when they are looking to sell their home, often in a northern part of the country. They visit our resort and find the house, community atmosphere, social engagement and, of course, the weather they’re looking for here,” he added. “Increasingly, we’re now also seeing people who already live in the Phoenix area coming to us for those same reasons.”
The community shares common space and amenity packages similar to ViewPoint. However, rather than golf courses, it offers lawn bowling, billiards, horseshoe pits and extensive crafting facilities. This includes dedicated rooms for lapidary arts, silversmithing, woodworking and pottery.
A Lakeside Village North of Houston
ELS purchased the Thousand Trails network of campgrounds in 2008. Among the more than 80 properties in the portfolio was Thousand Trails Lake Conroe, a lakeside campground about an hour north of Houston. Since then the company completed an expansion project for the property. It incorporates additional RV sites, as well as 50 new manufactured home sites.
“Our manufactured homes in the property have been very popular,” Bunce said of Thousand Trails Lake Conroe. “We sold out the first 50 MH sites and we just started a project adding another 67 RV sites.”
Additionally, the property features lake access that draws many visitors. Residents bring small watercraft to enjoy on the popular 21,000-acre swimming, fishing and boating lake north of Houston.
“Having access to the lake is very important to our customers,” he said. “We offer a number of boat slips for residents and guests, as well as a boat launch on the property. There’s also a covered outdoor social area, an indoor lodge, a large swimming pool with cabanas, tennis courts, a fitness center and dog park.”
Equity LifeStyle Properties purchases homes from many manufacturers. However, its recent western expansion projects have resulted in a focus on Cavco products for both manufactured homes and park models.
The Future of Growth at Equity LifeStyle Properties
Acquisitions also contribute to portfolio growth at ELS. Through the first seven months of this year, the company acquired four properties in Florida, adding nearly 1,900 sites to the portfolio. Of these, three were manufactured housing communities.
The other key element to the ELS growth and investment strategy is development.
Expansion properties under consideration are evaluated for…
- Market conditions
- Demographic trends
- Zoning and entitlements
- and infrastructure requirements
In all cases, ELS seems intent on making additions and changes that its customers find favorable. Bunce said the company is able to gauge interest from website activity and social media, but also heavily weighs customer sentiment and satisfaction through one-on-one conversations, meetings with homeowners’ associations and responses to customer satisfaction surveys.
“We have a lot of different ways to measure and ensure we’re responsive to our customers,” Bunce said.
Among those measurements is likely the company’s solid history of occupancy growth. Occupancy in ELS manufactured home communities sits at nearly 95 percent, and the company has had 35 consecutive quarters of occupancy increases across the portfolio.
“We work hard to ensure we’re providing the lifestyle offerings our customers are looking for,” Bunce said.
Favorable Trends for Equity LifeStyle Properties
Equity LifeStyle Properties has positioned well to take advantage of demographic trends during the next several years. Approximately 70 percent of its properties cater to Baby Boomers. Ten thousand Boomers will turn 65 each day for the next 12 years, according to the Pew Research Center.
Manufactured home shipments are up 50 percent in five years, and recently achieved an 11-year single month sales peak. This is an industry-wide measure of success mirrored by trends with ELS properties.
“We continue to see a strong home resale market, which is a key indicator of demand for the homes in our communities,” Bunce said.
In addition, the characteristics of the RV side of the business also are positive. ELS numbers show there are about 9 million RVers in the country and about 1.5 million RV sites. Furthermore, industry trends such as the growing popularity of peer-to-peer RV rentals are positively impacting the amount of time RVers spend in those campgrounds.
“Meanwhile, our hybrid RV and MH communities are positioned to attract customers in all segments of the RV-to-MH lifecycle. From the weekend camper to the snowbird to the full timer… and, in many cases, the former RVer who prefers to purchase a manufactured home in their favorite resort,” he said.
With its very first property purchased in 1969, ELS will celebrate its 50th anniversary next year.
“We’re very proud of our history of providing quality communities and RV resorts for our customers,” Bunce said. “We have a lot to celebrate.”