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Business Observer Thursday, Oct. 28, 2021 4 weeks ago

Manufactured homes pioneer still rolling along

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Murex Properties' Steven Adler follows his father's footsteps into business — and earns his industry's highest honor.
by: Louis Llovio Commercial Real Estate Editor

Dr. Steven P. Adler. Has a nice ring to it, doesn’t it?

That’s the title Adler, president of manufactured home developer Murex Properties in Fort Myers, could have gone with had he chosen a different path back in his student days. He was 25, had two master’s degrees at the time and, having worked on studies for the National Forestry Service and the Army Corps of Engineers in 1974 and 1975, was about to enter a PhD program.

But he decided to do something else. And that something else was to carry on his father’s legacy in an industry — manufactured housing — that Steve Adler Sr. if not invented in Florida, perfected.

As it turns out, the younger Adler, 71, made a pretty go decision.

Today, Murex, which he founded 17 years ago after working on the corporate side of the industry for nearly 20 years, owns and manages 20 manufactured home developments in three states. Murex has 157 employees, including 10 or so who work out of the company's Fort Myers headquarters. Adler sits on industry boards and is dedicated to making the sector better and providing more affordable options for homeowners — without sacrificing the benefits.

For this work, Adler was named to the Recreational Vehicle/Manufactured Housing Hall of Fame in September, again following in his father’s footsteps. The elder Adler received the same honor in 1980.

Jim Ayotte, executive director for the Florida Manufactured Housing Association, has known Adler for more than 25 years and says he is an industry leader who leads by example with "some of the finest age 55+ manufactured home communities in Florida."

Ayotte says Adler always looks to increase the value to residents and, in addition to the amenities and maintnence, negotiates discounts on services that are then passed on. 

“Steve is a consummate professional," Ayotte says. "He runs a great business by putting his customers first.  He is generous with his time and talents.”

So, having reached the pinnacle of his career, created a company that could live on for generations and rewarded with one of his industries highest honors, Adler can move on and enjoy his days, right?

Nope. The same curiosity and drive that sent him searching for that something else as a student keeps him going today.

“It’s like anything else in life, it’s finding a balance,” Adler says. “I like the challenge. I think, mentally, it keeps me sharp and I still find it interesting. My whole life, if what I was doing wasn’t fun, I’m not going to do it.”

The Lifestyle

The manufactured home industry, Adler says, grew out of people owning travel trailers in Michigan and Indiana where the auto industry was king. In the years after World War II, many of these Midwesterners began heading south, to Florida, in trailers.

In 1955, Adler Sr., an attorney, opened Trailer Estates in Sarasota.

He opened it as a subdivision, selling individual lots to people who’d place their trailers on them. Trailers Estates had 1,000 lots and sat on Sarasota Bay. It had its own marina, its own firehouse, it had about 20 shuffleboard courts and a large meeting hall hosting square dances and other activities.

“It was really a lifestyle community,” says Adler. “He was way ahead of his time in 1955. He was a real innovator.”

Murex’s parks today are an outgrowth of the Trailer Estates’ operation.

The first two communities Murex was involved in were San George Estates in Medford, Oregon and Summerfield in Killeen, Texas — which the company still runs. The majority of its 20 communities are in Florida.

Each of the company’s developments are different. But looking across the portfolio you’ll find multiple properties with lakes stocked with fish for anglers, pools, tennis courts, nature areas, clubhouses, walking trails and a host of other amenities. At Lakeland’s Schalamar Creek, there is a golf course.

Adler says Murex deals mostly in 55-and-older communities, which have a larger focus on lifestyle. The company has surveyed its properties to see what residents were doing and came up with a list of 400 different activities and events across the communities. This, Adler says, means these developments are producing “the most gregarious, active senior lifestyle in the country.”

“A lot of people move into condominiums and don’t even know who their neighbors are,” Adler says. “At these communities, people are extremely interactive, extremely involved. They themselves help initiate all kinds of activities. And we like to supplement them with new ideas.”

As the amenities have changed, so too have the homes. Units have grown from travel trailers to full-on manufactured homes that can be difficult to differentiate from a traditionally built house. There are still a lot of options that fall into the manufactured homes category, from what Adler deals with to entry-level mobile homes.

And these homes can be set up most anywhere — from large private lots in rural areas to subdivisions.

According to the Manufactured Housing Institute’s 2021 industry overview, 22 million people in the U.S. live in manufactured homes. The units make up 9% of single-family home starts.

One of the key reasons for the popularity is affordability. The institute reports the average price per square foot for a manufactured home is $57, compared to $119 for a site-built home. What keeps the prices so low, the institute says, is “the efficiencies of the factory-building process.”

“Manufactured homes are constructed with standard building materials, and are built almost entirely off-site in a factory,” the institute says in the overview. “The controlled construction environment and assembly line techniques remove many of the problems encountered during traditional home construction, such as weather, theft, vandalism, damage to building products and materials, and unskilled labor. Factory employees are trained and managed more effectively and efficiently than the system of contracted labor employed by the site-built home construction industry.”

But lower costs don’t necessarily affect the quality and amenities of manufactured homes, which sometimes rival traditional homes. Buyers today for example, in many cases, are able to pick exterior styles and finishes that can include vaulted ceilings, working fireplaces, state-of-the-art kitchens and porches.

The Business

Murex’s properties are land/lease communities. Basically, these are income properties where the resident owns the home and Murex owns the land and supplies the services.

Because it’s so difficult and expensive to move the homes, it’s a stable business without a lot of turnover, Adler says. “It’s an interesting business,” he says, adding that “we’re long term holders, we’re very resident-oriented, we try to do everything we can for the residents and provide a good value.”

And, like the more traditional housing market, things are booming right now for Murex.

The company resells used homes as a broker and currently has almost no inventory available. Adler is seeing the lowest inventory and highest sales he’s ever dealt with and prices are rising on a product often seen as a depreciating asset. Two bedroom and two-bathroom homes are selling anywhere from $50,000 to $140,000 depending on the community and other factors. New ones, which are also selling fast, sell anywhere from $120,000 to $200,000, he says.

“I like the challenge. I think, mentally, it keeps me sharp and I find it still interesting." Steven Adler, president Murex Properties

 

Site rental runs between $650 and $850 a month.

Adler credits the pricing, in part, on the upkeep, services, locations and “curbside appeal” at the Murex properties — factors that affect all real estate sales. “That myth of depreciation has not held up in our communities,” he says. “It may in others, but not ours.”

Another reason for the bull market? Most residents only live in the communities for part of the year and after the pandemic they don’t want to spend another winter in a colder part of the country.

Adler declines to provide revenue or sales figures for Murex. 

The Future 

Even amid the hot market, Adler says Murex will continue growing slowly and methodically. Sure, he says, there are REITs that own hundreds of manufactured home communities, but “I have no inclination of doing that.”

“We could build up to something like that. We have the capability and the kind of contacts to do it,” he says. “But that’s not my business plan. We’re going to grow, we do a couple of acquisitions a year maybe, but that’s all I’m interested in doing.”  

For Adler and Murex, the strategy is not far different from what his father did back in the 1950s.

Adler says his dad, an attorney in Miami, saw lots of all kinds selling all over Florida. So he started looking around and found trailers and RVs parked everywhere and asked himself, “'What if people bought lots for those?'”

He put together investors, designed Trailers Estates and, voila, helped create an industry.

One of the early salesmen at the property was Adler’s grandfather. On weekends, the young Adler would follow his grandfather around as he sold homes. Watching both his grandfather and father, he says, helped lay the foundation for the businessman he’s, all these decades later, tried to become.

“Both my father and my grandfather were just really ethical, moral, good people. They’d just do business that way,” Adler says. “You don’t have to take every dollar. Just be fair and treat people well. Both of them were that way.”

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