In the ever-evolving landscape of real estate investment, RV parks stand out as unique and lucrative opportunities. As the US economy experiences shifts, there's a notable uptick in investment sales within this sector. In a recent discussion with Maury Vanden Eykel, SVP of Corporate Capital Markets at CBRE, we explored the growing trend of RV park investment sales, the driving factors behind it, and essential advice for navigating this dynamic market.
Rising Trends in RV Park Investment Sales:
Given the state of the US economy and the evolving financing landscape, RV park investment sales are gaining traction. Investors are drawn to the potential for robust returns in a market where outdoor and recreational spaces are increasingly valued. The appeal lies not only in the financial gains but also in the diversification and resilience that RV park investments offer.
Due Diligence Imperatives:
Vanden Eykel emphasizes that success in RV park investment sales is contingent upon meticulous due diligence. Whether you're a buyer seeking to expand your portfolio or a seller looking to maximize returns, the following key aspects should be integral to your due diligence strategy:
Environmental Site Assessment (ESA): Given the diverse nature of RV parks, conducting a comprehensive ESA is crucial. Identifying any environmental risks or contamination issues early on is vital for risk mitigation and ensuring the long-term value of the investment.
Property Condition Assessment (PCA): RV park infrastructure, from utility systems to recreational amenities, requires a thorough evaluation to uncover potential maintenance issues and assess the property's overall condition.
ALTA Survey: Accurate land surveys are essential for RV parks, ensuring a clear understanding of property boundaries, easements, and any encroachments.
Zoning Report: A clear understanding of zoning regulations and land-use restrictions is crucial to assess the property's potential and any limitations that could impact its value.
Seismic Risk Assessment (SRA): Depending on the location, RV parks may be vulnerable to seismic risks. An SRA provides insights into potential vulnerabilities and guides risk mitigation strategies.
Appraisal: Given the unique characteristics of RV parks, a detailed appraisal is essential to establish a fair market value and facilitate a mutually beneficial transaction.
Customizing Due Diligence for RV Park Investments:
Investors should adopt a proactive and tailored approach to due diligence based on their investment goals. Whether you're looking to enhance the value of the property or seeking opportunities for strategic improvements, customizing the scope of assessments is key.
Vanden Eykel recommends a staged, rapid-paced approach to due diligence, addressing potential issues upfront to provide both buyers and sellers with confidence. For RV park investments, this might involve tailored environmental assessments, infrastructure evaluations, and a thorough analysis of amenities to align the property with the investor's objectives.
Efficiency in Portfolio Transactions:
Many RV park investment sales involve portfolio transactions, necessitating a streamlined and efficient due diligence process. To navigate this challenge successfully, consider the following:
Single Source: Opt for a consultant capable of providing all required assessments to ensure consistency and streamline the due diligence process.
Geographic Reach: For RV parks spread across different locations, partnering with a national consultant with local expertise can reduce travel costs and streamline site assessments.
Centralized Staffing and Coordination: Efficient deployment of staff and centralized project management ensure a smooth process and clear communication between all parties involved.
Diverse In-House Expertise: Access to in-house experts is crucial for addressing any unexpected issues during due diligence, ensuring accuracy and reducing the time and expense associated with external specialists.
Known, Reliable Brand: The reputation of the due diligence provider is paramount. Investors should partner with trusted consultants like Partner Engineering and Science to ensure the integrity of reports relied upon by all parties involved.
RV park investment sales present exciting opportunities for investors seeking diversification and robust returns. To ensure success in this dynamic market, a comprehensive and customized due diligence approach is essential. By adopting a proactive strategy and partnering with experienced consultants, investors can navigate the RV park investment landscape with confidence, maximizing returns and achieving their long-term investment objectives.
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