RV Parks: An Up-and-Coming Commercial Real Estate Investment Asset
After a long day on the highways and byways of the United States, drivers of recreational vehicles need a rest – and they find it at RV parks. For decades, these destinations have ranged from bare-bones (dirt lots with barely defined spaces) to locales offering water and electricity hookups.
In recent years, RV park owners have improved their spaces. These improvements are catching the attention of commercial real estate investors and lenders. Connect CRE reached out to Trez Capital Co-Chief Executive Officer & Global Head of Origination John Hutchinson to get some answers about the increased interest in luxury RV parks.
RV parks have been defined as places where people with recreational vehicles can stay overnight or longer in allotted spaces. The parks usually have access to activities, events, entertainment and amenities such as outdoor seating. The individual spaces are typically unpaved or covered with asphalt.
Luxury RV parks provide hotel-style amenities on the property, such as resort-style pools, fitness facilities, full-service restaurants and bars, package lockers, recreational sporting courts, office spaces and dog parks. These types of parks typically offer the same amenities available in most multifamily properties today.
Compared to traditional parks, luxury RV parks are intended for long-term residents. They cater to people who travel around the country, on vacation or short-term workers who travel for their jobs.
The luxury RV parks are piquing the interest of investors due to their superior construction, high-end amenities, and their flexibility to cater to both short-term and long-term stays.
The COVID-19 pandemic and remote work stimulated the rising interest in the RV and travel business as people had more flexibility with where and how they worked. During this time, RV unit sales increased, and this trend has continued post-pandemic.
RV parks are an evolving asset class for investors and are becoming more sophisticated properties, similar to the trend we saw with self-storage properties. These properties have great potential as they transition from mom-and-pop run operations to more institutionalized ownership.
Given new travel and work patterns, RV park properties will provide the housing supply these travelers and workers require. Investors should continue to watch the success of new RV park properties as they reach completion, including the two in Texas mentioned earlier.
Provident plans to create an RV model and expand it to other locations to generate solid investment returns. Completing these new facilities will provide more insight into navigating the emerging RV park property market and determining the need to adjust and adapt for success.
