Flagship Communities REIT:
Ticker: MHC.UN
Stock Price: C$25.91/ US$18.69
Dividend Yield: 3.35%
Flagship Communities is the only Canadian pure-play on US Manufactured Housing Communities “MHC’s.” The REIT owns and operates a high-quality portfolio of 81 income-producing manufactured housing communities ("MHC") comprising 15,066 lots, located in attractive Midwest U.S. markets. The REIT is positioned as a consolidator in the fragmented MHC industry. Also the MHC environment looks quite attractive given there is limited new supply and home ownership costs having risen considerably leading to greater home unaffordability, thus, demand for MHCs remains quite strong and Flagship gas been outperforming it’s US peers! Another positive is that management is committed with a 25% stake!
Flagship Communities is the only pure-play MHC REIT listed in Canada. Flagship completed its IPO in October 2020, and its portfolio consists of 82 manufactured housing communities, comprising 15,137 lots located in Arkansas, Kentucky, Indiana, Ohio, Tennessee, Illinois and Missouri, West Virginia.
Experienced and aligned internal management team. Flagship was co-founded by CEO Kurt Keeney and CIO Nathan Smith in 1995. Since then, they have actively grown the portfolio, increasing lot count from 152 in 1995 to 15,137 currently. Flagship’s management collectively owns ~25% of the REIT, resulting in strong alignment with unitholders.
Fragmented industry. The MHC industry is highly fragmented, and therefore there is the opportunity to continue consolidating properties in the REIT’s target markets. With properties available at cap rates from 4-8% and mortgage debt available at ~5-6%, returns on acquisitions can be highly accretive.
Strong market fundamentals should allow for continued healthy internal growth. Since 2021, Flagship has grown total portfolio rental rates and occupancy by 25%. In 2024, Flagship generated internal growth of 14.6%.
Commitment to dividend growth - the Board of Trustees recently approved a 5.4% increase to the monthly distribution (to an annualized rate of US$0.654 per unit) effective November 17, 2025. This represents the fifth consecutive annual increase to the distribution and the greatest increase so far, highlighting the REIT’s cash flow growth over the past year, and prospects for continued growth.