CenterSquare Expands into Manufactured Housing Sector Through Acquisition of Houston-Based Piney Woods

August 2023

To-be-built community acquired in partnership with K8H Ventures

CenterSquare Investment Management, in a joint venture with K8H Ventures, has acquired Piney Woods, a to-be-built 394-lot manufactured housing community located in the Crosby submarket of Houston, Texas. The acquisition represents CenterSquare’s first private equity investment in the sector and was made via joint venture with K8H Ventures, an experienced, local manufactured housing operator that has a strong track record in the Houston market.

The Property’s central location allows it to benefit from adjacency to both the Port of Houston, which is experiencing significant growth and generating blue-collar jobs, as well as the thriving Lake Houston community. Piney Woods will help address the dilemma of cost-burdened renters who comprise half of this growing metropolitan hub by offering an affordable housing alternative for a market that is witnessing some of the highest population growth rates nationwide. Texas continues to lead the United States for annual manufactured housing shipments by state.

The Property will be built to Fannie Mae Level 4 and 5 Quality Rating Standards and will feature modern, new product, appealing to long-term renters seeking a home-like living experience at a reasonable cost. Piney Woods will offer an array of premium amenities including a swimming pool, basketball court, playground, walking trails and green spaces.

CenterSquare has previously invested in manufactured housing through the firm’s listed real estate securities platform. This direct investment aligns with CenterSquare’s thesis of acquiring and/or creating communities that are fortified by strong secular tailwinds including the rising cost of home ownership, increasing demand for larger spaces and amenitized communities, and a limited inventory of affordable options located in high growth submarkets.

“Manufactured housing has emerged as an attractive, affordable solution to the evolving needs of today’s hard-working households seeking spacious, contemporary living within vibrant communities while also providing the opportunity for ownership,” said Victoria Madrid, Vice President of Private Equity Real Estate at CenterSquare. “Our investment in Piney Woods alongside our partners at K8H Ventures demonstrates our conviction in this sector and the long-term growth of the Houston market.”

The land is shovel ready, and lots will be developed over a 12-month period with completion scheduled for August 2024. The business plan calls for the completion of the horizontal site work and a robust pre-leasing marketing campaign to generate leasing velocity.

“K8H Ventures is excited to announce the successful closure of the Piney Woods development in Crosby, TX,” said Harry Winslow, Co-Founder of K8H. “Together, with CenterSquare whose unwavering support has been pivotal, we are dedicated to addressing Texas’ affordable housing crisis. We are not only creating communities, but also changing the landscape of the affordable housing industry.”

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