Ocean Ridge Closes on Off-Market MHP Portfolio in TN Growth Corridor
Background
We’re excited to share Ocean Ridge Capital’s latest investment: the acquisition of a 149-lot mobile home park portfolio spanning three communities in the Clarksville-Guthrie corridor.
We partnered with a veteran MHP investor/operator who sourced this opportunity off-market, hand-selecting the top three performing parks out of an eleven-park portfolio, focusing on those with clean infrastructure, better tenant profiles, and the clearest path to upside. This selectivity gave us stronger day-one fundamentals and better control over the operating narrative.
The deal aligned squarely with our core investment thesis: stabilized income, operational alpha, and downside protection baked into the basis. It also reflected how we prefer to invest—not just in the asset, but in the operator. In this case, a long-standing partner with a track record of conservative execution and real-world reps managing hundreds of lots across several MHPs through every kind of market cycle.
Industry Thesis: Why We Love Mobile Home Parks
We strongly believe that mobile home parks are one of the most resilient and mispriced corners of U.S. real estate. Underpinned by structural undersupply, disjointed operations, and mission-critical characteristics, this asset class is uniquely positioned for asymmetric outcomes in any economic environment. That said, there are three core reasons why we continue to invest in MHPs with conviction:
Tenant-Owned Model Drives Efficiency: Residents typically own their homes and rent the land, which means lower turnover, fewer maintenance headaches, and more reliable cash flow. Parks run more efficiently, with operating expenses closer to 30–40% versus 50%+ in typical multifamily.
Zoning Constraints Limit Supply: Most cities make it nearly impossible to build new mobile home parks—whether through outdated zoning laws, local resistance, or bureaucratic friction. More than 80% of U.S. municipalities block new development entirely. That means existing parks are effectively grandfathered in, giving well-run assets durable pricing power and long-term scarcity value.
Professionalism is the Edge: Many parks are still owned by small landlords with limited systems or professional management. That creates opportunity for experienced operators to come in, clean up operations, and unlock real value—without needing to over-improve or overpay.
These fundamentals make MHPs one of the last places in real estate where you can still underwrite to real yield, not just hope for appreciation. It’s an asset class that lets you protect principal, generate stable income, and compound quietly while everyone else chases noise.
Deal Thesis: Why We Love This Deal
This investment offered what we look for: cash flow from day one, a clear path to value creation, and no need for a heroic turnaround. Our basis was well below third-party valuation, and the business plan centers on lease-up, light operational improvements, and gradual rent increases—all without requiring major capex or a repositioning strategy. Overall, we saw several key factors that made this an attractive investment opportunity:
Vertically Integrated Operations: Our operating partner brings end-to-end control through a vertically integrated model with in-house property management and construction oversight. This gives us tighter execution, faster response times, and greater accountability across the board.
Immediate Cash Flow with Clear Upside: The parks were generating income at closing. With a solid base in place, we can focus on unlocking upside by filling vacant pads and making smart operational improvements without needing to bet on a turnaround.
Low Lot Rents = Headroom: Rents were meaningfully (40–50%+) below neighboring parks. That gives us room to grow income over time while keeping the communities affordable and stable for residents.
Clean Utility Setup: Most tenants are billed directly or sub-metered for water and sewer, which helps reduce operating costs and protects margins over time.
Market Tailwinds: Clarksville and the surrounding corridor are seeing more than $5B in industrial development—from blue chip companies like LG, Google, and Novelis. This industrialization is fueling job growth and demand for affordable housing, even as new supply remains constrained.
Together, these dynamics gave us confidence in both the durability of the in-place cash flow and the clarity of the value creation plan. With a strong operator, aligned structure, and measurable execution levers, we view this investment as a high-conviction entry point into a recession-resilient asset class. We’re targeting a mid-to-high teens net IRR over a 5–10 year hold.
Closing Thoughts
This transaction exemplifies our focus on sourcing durable, cash-flowing assets with clear operational upside and strong downside protection. We remain disciplined in our underwriting and selective in our partnerships, and we view this acquisition as a high-conviction addition to our portfolio.
