Saunders Property Co., a Newport Beach-based real estate investment firm, has acquired the 256-unit Pacific Mobile Home Park, which is next to the Pacific City development site in Huntington Beach.
The 18.2-acre property, located about a block from Pacific Coast Highway, sold for $46.4 million, or about $2.5 million an acre, according to brokerage data.
The site is expected to remain a mobile park for now but could eventually be eyed for apartment or single-family home redevelopment, according to brokers with Irvine-based land brokerage WD Land who worked on the deal.
The property is about five blocks from the Huntington Beach Pier and is just east of Pacific City, a 31-acre development site that’s expected to hold more than 500 apartments, a hotel, and 191,000 square feet of shops, restaurants and offices.
It’s the second large mobile home park that Saunders Property, led by President John Saunders, has bought in Huntington Beach.
The company bought Huntington Shorecliffs, a 37-acre property about a mile away from Pacific Mobile Home Park, in 2008.
Terms of that sale were not disclosed; the 304-unit property was refinanced for $54 million last year, according to property records.
“He really understood the market as an owner of another park in Huntington Beach,” WD Land founding Principal Les Whittlesey said of Saunders. “He found embedded value in our park through professional management and potential upgrades.”
Pacific Mobile Home Ppark was built in 1953; upgrades were completed in 2008. The property has a mix of single-wide and double-wide homes, a community pool and a clubhouse.
Saunders, who also runs Newport Beach-based Core Realty Holdings LLC, owns close to 4 million square feet of commercial real estate, primarily in Orange County. He also runs one of the country’s largest coin dealers, Newport Beach-based London Coin Galleries.
The deal for Pacific Mobile Home Park is the second sizable mobile home park sale reported to have closed in Orange County this year.
Laguna Terrace Park, a 46-acre mobile home park in Laguna Beach, was bought in March by Chicago-based Hometown America Communities, an owner of seven other mobile home communities in California
The Laguna Beach property, which is on a set of rolling hills just off South Coast Highway, has 158 home spaces. It was purchased for about $62 million, according to reports.
Pricing for higher-quality mobile and manufactured-home parks has gone up of late, pushing down capitalization rates—the expected initial return from rents—to nearly 5%, a level similar to apartment deals, according to WD Land Senior Land Advisor Greg Sullivan.
Institutional investors and real estate investment trusts have been increasingly active in the sector, according to Sullivan, who worked on the Huntington Beach deal with Whittlesey and Irvine-based Cortland Co.’s Brian Hopkins.
“Well-located and maintained mobile/manufactured-home parks have proven to be an excellent long-term investment,” Sullivan said.
Three brothers, operating as Pacific Mobile Home Park LLC of Huntington Beach, sold the property to Saunders. The property had been a long-term family investment.
