904 Industrial Rd, Pipestone, MN 56164

Sunstone Real Estate Advisors is pleased to present Pipestone Estates, a 41-site manufactured housing community located in Pipestone, Minnesota. The community is currently operating at approximately 49% physical occupancy, with 20 occupied units. The community is made up of 17 resident-occupied sites, 14 community-owned homes, and 10 vacant sites, providing a clear and executable path to stabilization. Current average lot rent is approximately $505 per month, with in-place revenue of approximately $139,000 under the current rent roll with adjusted expenses. Utilities are billed-back to tenants, resulting in a straightforward operating structure and meaningful expense recapture. Pipestone Estates presents a compelling value-add opportunity driven by lease-up, rent growth, and operational normalization in a supply-constrained regional market.

The underwriting reflects a measured stabilization strategy centered on the absorption of vacant sites, modest annual rent increases, and improved operating efficiency under professional management. Total revenue is projected to increase from approximately $139,000 at current operations to $276,500 by Year 3, driven primarily by occupancy gains and contractual rent growth. Net Operating Income is projected to increase from approximately $26,000 currently to $106,940 by Year 3, as the community approaches stabilized occupancy levels. Expense ratios improve from approximately 81% at current operations to 61% by Year 3, reflecting improved scale efficiency as revenue expands. By Year 3, the asset is underwritten to achieve a 13.37% cap rate and a 10.02% cash-on-cash return, highlighting the strength of the stabilization thesis.