TSX:MHC.UN - Post by User
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Possibleidiot01on Jan 31, 2023 2:11pm
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Post# 35257441
Stephen Takacsy - BNN - TOP PICK
Stephen Takacsy - BNN - TOP PICK FLAGSHIP COMMUNITIES (MHC.U TSX)
A unique and stable sub-asset class in real estate.
Owns over 60 manufactured housing communities in the U.S. Midwest. These are unique real estate assets because municipalities aren’t issuing permits to build new communities because they don’t collect much tax on these properties. Only the land is taxed by the municipality and not the home which is treated as a depreciating asset (i.e. “mobile” homes are treated like cars). MHC’s have a very stable tenant base with no rent control and low capex. It’s a very fragmented industry owned by “mom and pop” operators, so it is a great industry to consolidate because of the SG&A cost synergies and revenue growth through rent increases, higher occupancy and value-added services like parks. It’s USD denominated and the only pure-play publicly-traded such company in Canada and has a dividend yield of 3.6 per cent.