MANUFACTURED HOUSING

Long-Term Investment Rationale

Why Invest in Land Leased Manufactured Housing Communities

Stable tenant base

•    Approximately 5 to 10% annual tenant turnover (vs. 50 to 60% for apartments)
•    Significant cost to physically move home from site
•    Personal attachment to home and sense of community
•    On-site improvements (decks, carports, and landscaping)

Low capital expenditures

•    Community owner responsible only for infrastructure (roads, lights, common
     grounds, amenities)

Limited new supply

•    Zoning restrictions and community bias against mobile home parks
•    Limited new tax revenues as homes are generally treated as personal property

High margin and flow-through

•    Rental increases in excess of CPI increases
•    Minimal incremental community owner costs with increased occupancy

Value creation opportunities

•    Under-capitalized and/or under managed communities
•    Below market rents and/or ability to reduce and/or pass-through costs

Other income available

•    Sale of homes, self-storage, other