What are some niche asset classes in real estate that are overlooked right now and poised for growth? Ones that are considered specialist and dominated by a few individuals? I'm talking about like self-storage facilities pre GFC, that kind of thing.
Curious to hear y'alls thoughts. Thinking along the lines of examples like mobile park homes, marinas, cold storage. Would love to hear some input from those who've worked on "unusual" deals. Cheers
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Bored today so here are a few I just thought of - curious if anyone here has worked on any of these. I have experience in 1 or 2.
I've thought of this before. Say a deep-pocketed investor makes a big, concentrated bet on a cheap and crime-ridden neighborhood. Buy up as much as possible in a defined area. At sufficient scale they could pay for private security, cameras, good property management, etc. and suppress crime, thus raising property values and rents.
There are companies that do this. It's not quite to the level you're talking about, but when you buy and redevelop/add secured buildings to 80% of a neighborhood, the rest of the neighborhood follows.
Just saw you already had thought of a few of these. Adding some more:
Cap rates on MHC are well below debt rates. I am talking like ~150-200bps below debt rates. Not sure how deals are getting done and who's buying these parks. 9 times out of 10 the parks are junkers
Private Airplane hangars
There is already a public company doing this. Check out Sky Harbour.
What's insurance like on marinas?
If you’re looking at coastal Florida/Carolinas, good luck. Getting crushed on MH in similar locations. May have more luck inland.
Why are you getting crushed on manufactured housing in those areas? I imagine rent growth has been strong. Has your expense growth been out of control? I’m assuming insurance and payroll are probably up. What’s the reasoning?
6-8% of revenue for insurance for single assets. A regionally diverse portfolio should get you to ~4%. If the marina is destroyed by a hurricane the new replacement dock rates will be increased to keep this in line.
Does anyone have any ideas specifically on current and/or proposed tax incentives? Not very sexy, but it's how people have generated wealth in the past.
Off the top of my head, one would be NC brownfield tax credits. You receive a massive tax discount for ~5 years on new development after cleaning a previously contained site (abandoned gas stations, old textile mills, industrial plants, former dry cleaners, and other abandoned industrial or commercial properties).
Only makes sense if you have the income to offset it. We used to structure deals where we had A and B LPs where the Bs would get outsized cashflow and the As would get outsized depreciation essentially so this one guy who offset the couple Ms he was making.
Opportunity zones if you can find them but finding good development spots is pretty sparse
Private prison? Anyone have experience here?
There is a really great semi satirical twitter thread on this that pops up every once in a while.
Self storage
Is it still niche when BX is buying?
GreenStreet covers it, definitely not niche
Cemeteries - Can often do a P3 deal with a city and put a funeral home on the site to be leased to an operator. VA, Pet, etc, niches available in this niche as well.
Active adult, low supply currently in the market with very high demand.
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