Top 5 States for Destination RV Park Development (2025)

Top 5 States for Destination RV Park Development (2025)

Introduction

Ground-up RV park development in 2025 is benefiting from resilient outdoor travel demand, even as higher interest rates and cautious lending have tempered the post-2020 boom. Investors and lenders are focused on destination-type RV parks – those in vacation areas or offering resort-caliber amenities – that can deliver strong IRRs, stabilized yields, and long-term value despite the current market headwinds. This analysis identifies the top 5 U.S. states best positioned for new destination RV park, with the investment outlook and luxury resort trends driving capital allocation projects, ranked by investor-centric metrics (projected returns, yield-on-cost, long-term appreciation) and supported by market data and feasibility fundamentals. We examine why these states rank highest (e.g. robust demand, tourism infrastructure, favorable absorption trends, and developer-friendly climates), and provide segmentation by park class (A/B/C), market type, and vintage to acknowledge intra-state variability. We also present a cap rate analysis – incorporating the risk-free rate, risk premiums, NOI growth, and liquidity factors – alongside debt considerations such as DSCR constraints and loan costs that are shaping pricing. Finally, a 2026 scenario outlook (base, upside, downside) illustrates potential value implications under different economic conditions. All findings are grounded in industry data (e.g. KOA, RVIA, CoStar/Yardi reports) and stated assumptions, suitable for a feasibility consultant or lender's due diligence.

Ranking Criteria and Methodology

Investor Return Metrics: We prioritized states where new RV resorts can achieve attractive stabilized NOI yields (cap rates on cost) and project IRRs in the mid-teens or higher. This often corresponds to markets with high occupancy potential, strong daily rates, and room for future NOI growth. Long-hold value (appreciation potential) was also considered – states where demographic and tourism trends point to sustained demand growth score higher because they support long-term asset appreciation beyond just current cash yield.

Market Demand & Absorption

We evaluated RV travel demand (camper visit trends, park occupancy levels) and supply absorption. States with underserved demand (high camper counts relative to existing sites) or recent strong absorption of new sites signal opportunities for new development. For example, over half of U.S. campers reported difficulty finding available campsites in 2024 due to full bookings – a supply-demand imbalance especially acute in top vacation states.

Tourism Infrastructure

The presence of popular destinations (national parks, beaches, theme parks, etc.), robust state tourism (visitor counts, spending), and supporting infrastructure (highway access, nearby attractions) heavily influenced rankings. States drawing millions of visitors annually create a large customer base for destination RV parks. Florida, for instance, hosted over 140 million visitors in 2024, an all-time high, reflecting a massive tourism ecosystem that can feed RV park demand year-round.

Regulatory Climate & Development Feasibility

We factored in zoning and permitting friendliness for campgrounds. States with more permissive land-use regulations, supportive local governments, and reasonable entitlement timelines got a boost, since these factors materially impact development risk. Conversely, markets with severe zoning hurdles (e.g. California's stringent environmental rules that have kept new RV supply static) were scored lower despite high demand, because feasibility for ground-up projects is more challenging.

Segmentation & Risk Dispersion

Within each state, we considered the range of asset sub-types – from high-end Class A RV resorts in prime locales to simpler Class B/C parks – and how performance varies. Top-ranked states show strength across multiple segments (e.g. luxury snowbird resorts and family campground markets), not just one niche. We note this dispersion in the profiles below.

Top Five States for Destination RV Park Development in 2025

Using these criteria, we now present the top five states for destination RV park development in 2025, in rank order:

Top 5 States for Destination RV Park Projects

1. Florida

Florida tops the list due to unmatched year-round demand and a development-friendly environment for RV resorts. The state is a powerhouse of both domestic and international tourism – with over 130 million U.S. visitors in 2024 – and it has diverse destination regions from beaches to theme parks. This broad, multi-season tourism base supports strong occupancies at RV parks nearly year-round. Winter "snowbird" traffic is especially lucrative; Florida attracts legions of seasonal RVers escaping colder climates, filling parks for extended stays at premium monthly rates. Summers bring family vacationers to coastal areas and theme parks, keeping demand resilient in what is off-season elsewhere. Popular corridors from the Panhandle beaches to the Florida Keys are enjoying record camper traffic. In 2024, Florida's parks had some of the highest utilization rates nationally, and the state's RV parks often operate at or near full capacity during peak seasons.

Florida also leads in new RV park supply absorption, indicating it can readily support additional parks. In fact, Florida has led the country in new park development for several years, adding roughly 3,600 new RV sites from 2022–2024 – the largest net increase of any state. These additions span multiple ground-up resort projects and expansions, yet even this influx has barely kept pace with demand. High consumer interest is evidenced by advance bookings and "no vacancy" signs; in recent surveys a majority of campers nationwide cited Florida as a top destination they struggled to find openings in during peak times. Investors are targeting Florida for its robust occupancy and rate growth potential – new upscale RV resorts in prime tourist areas have achieved premium ADRs (average daily rates) supporting 8–10% stabilized cap rates on cost, while offering long-term appreciation as Florida's tourism economy continues to expand.

Tourism Infrastructure: Florida's infrastructure is ideal for destination RV parks. The state boasts dozens of famous attractions (Disney World, Universal Studios, national seashores, the Everglades, etc.), 825+ miles of beaches, and a well-developed network of highways and services catering to travelers. RV parks can tap into established tourism circuits – e.g. snowbirds flowing down I-95 and I-75 or families doing the Orlando theme park circuit. This amplifies market demand for well-located parks. Moreover, Florida has a large base of RV owners (many retirees reside or winter there) and a culture of outdoor recreation, further enlarging the customer pool for new parks.

Regulatory Climate

While development in Florida still requires due diligence, the climate is generally pro-development compared to many states. Counties and municipalities that thrive on tourism often welcome new campgrounds (with reasonable zoning accommodations), especially in areas zoned for recreation. The Florida RV Park & Campground Association actively supports new projects, reflecting a favorable industry environment. Entitlements are typically manageable, though environmental considerations (wetlands, coastal setbacks, hurricane codes) must be respected. Overall, Florida offers a comparatively smoother path to build, especially relative to high-barrier states like California where new RV parks face intense permitting hurdles.

Segmentation & Dispersion

Florida's RV park market is broad, spanning Class A luxury resorts to mom-and-pop campgrounds. High-end RV resorts (Class A) in destination locales – for example, around Orlando's theme parks, the Florida Keys, or upscale Gulf Coast beaches – command lower cap rates (8–9%) due to strong income and institutional-level interest. These often feature extensive amenities (pools, clubhouses, marinas, etc.) and attract snowbirds willing to pay top dollar, resulting in stabilized occupancy >80% annually. In contrast, older Class B/C parks in secondary inland areas (or those catering to long-term residents rather than short-term vacationers) may trade at higher cap rates (10–12%+) and offer value-add potential through upgrades. Within the state, there is regional dispersion: Central Florida (Orlando) and South Florida see year-round demand and higher rates, whereas the Panhandle and North Florida have more seasonal peaks (summer) and slightly higher yield requirements. Nonetheless, virtually all parts of Florida benefit from the overarching tourism engine and retirement migration. The long-term value proposition is strong – Florida's population and visitor growth suggest that well-located RV parks will enjoy rising NOI over time, supporting excellent hold value.

2. Texas

Texas ranks a close second, offering a compelling mix of high demand, affordable land, and business-friendly conditions for RV park development. Texas is experiencing booming population growth and travel activity – it is a crossroads for cross-country RV trips and a Sunbelt state where RV usage is climbing. The state's size and variety are a strength: from the Hill Country wine region to Gulf Coast beaches and major metro areas, Texas has multiple draw areas for destination-type parks. Recent trends show RV tourism surging in parts of Texas, with new projects clustering around appealing locales: for instance, developers have targeted the Hill Country (e.g. Fredericksburg, Wimberley) for its scenery and wineries, areas near lakes and rivers, and sites along major travel corridors (I-10, I-35) that capture both tourists and one-night transient traffic. South Texas and the Gulf (e.g. South Padre Island) also attract winter visitors and vacationers. This breadth of markets provides year-round opportunities – summer tourism up north and hill country, winter draw in the south – helping to smooth seasonality and support strong annualized returns.

High-Conviction Investment

Texas has become a hotbed for new RV resort supply in the past two years, a sign of investor confidence. According to industry reports, numerous resort-style parks are under construction across Texas, featuring amenity-rich designs (resort pools, clubhouses, high-speed Wi-Fi, etc.). Many national outdoor hospitality developers (e.g. Northgate, Sun Outdoors, Blue Water) are active in Texas, indicating it's seen as one of North America's "most attractive regions" for RV investment. Importantly, absorption so far has kept pace – while competition is increasing, the demand fundamentals remain strong. Parks in Texas report high occupancy especially when offering modern amenities that meet the new standard. The influx of new residents (Texas cities lead the nation in population gains) also expands the local weekend camping market, not just out-of-state tourists. Investors can often achieve solid stabilized yields here: well-located new parks in Texas can underwrite cap rates in the 9%–10% range on year-1 NOI, with upside from rate growth as the region's popularity rises. In fact, some recent Texas development deals are even marketed with pro forma cap rates in the low-teens, reflecting value-add and strong income projections (though such high yields come with corresponding risk and should be vetted carefully).

Regulatory Climate

A major advantage for Texas is its developer-friendly regulatory climate. Zoning and permitting are relatively streamlined in many counties, especially in rural areas or smaller municipalities eager for tourism dollars. Land is plentiful and often unzoned outside city limits, reducing entitlement barriers (developers must still secure utility and environmental approvals, but there is typically less red tape than coastal states). Texas officials often view RV parks favorably as they boost local economies without the infrastructure burden of permanent housing. The result: shorter development timelines and lower soft costs, improving IRRs. That said, due diligence on local specifics is still required – e.g. floodplain issues or county-specific regulations – but overall Texas offers a welcoming environment to build.

Segmentation & Dispersion

Within Texas, market type and asset class differences are significant. The state has urban and suburban RV parks near cities (some serving oil/gas or construction workers as extended-stay residents), destination resorts in tourism spots, and simple rural campgrounds. Class A resorts (often new builds) in high-demand areas like the Hill Country or popular lake destinations can see cap rates ~8–9% due to strong bookings and professional management, while older Class B/C parks in remote areas or those catering mainly to long-term tenants (quasi-mobile home parks) might trade at 12%+ caps to account for higher risk or weaker transient demand. For example, a luxury new RV resort outside Austin with a waterpark and cabins will be valued much more aggressively than a no-frills campground in West Texas. Regional dispersion: Central Texas and North Texas (DFW area) parks benefit from both local and tourist traffic and thus achieve solid year-round occupancy. West Texas parks, on the other hand, often serve transient workers (e.g. in oilfields) and can have more volatile occupancy tied to industry cycles – these typically warrant higher yields to compensate risk. South Texas and Coastal parks draw winter Texans and beach-goers; they can be highly profitable in season but slower in summer, so underwriting must account for seasonality. Overall, Texas offers high IRR potential – relatively low land/acquisition costs plus strong NOI can yield excellent cash-on-cash returns – but investors should carefully benchmark comps and competition. The active development pipeline means new projects must differentiate themselves. As one industry brokerage noted, if your Texas park is "old-school" in feel, there is likely value-add upside to modernize, or alternatively, it may become a target for acquisition by groups seeking a renovation project. This dynamic underscores the importance of asset quality in realizing top-tier performance in Texas.

3. Arizona

Arizona secures the third spot, thanks to its combination of world-class natural attractions and a booming snowbird market. The state enjoys a mild winter climate in its lowland regions that draws tens of thousands of RVers each cold season – making it a prime location for destination RV parks catering to winter visitors. Areas like the greater Phoenix valley, Yuma, and Tucson turn into RV meccas from October through April, with retirees and nomads flocking to enjoy 70°F sunshine. Many parks maintain occupancies near 100% in winter and command monthly rates from $600 up to $1,200+ at premium resorts. This reliable seasonal influx underpins strong annual income for well-positioned parks (often the winter season revenue alone covers the year's expenses with profit). At the same time, Arizona's stunning natural landscapes – from the Grand Canyon and Sedona's red rocks to numerous national parks/monuments – fuel a robust flow of vacation travelers in other seasons. The state recorded over 13 million recreational visits in 2023 to its National Parks (Grand Canyon had ~4.7M, plus many more to Glen Canyon, Petrified Forest, etc.) and parks like Grand Canyon, Sedona, and Lake Havasu create high summer demand for nearby RV campgrounds. In short, Arizona offers bimodal demand: winter snowbirds in the south and spring-summer tourists in the north, allowing developers to target either or both markets.

Development and Performance: Arizona has seen steady new RV park development, particularly around its winter haven regions. For example, in the Phoenix metro and Yuma area, several new or expanded RV resorts have come online recently to serve the growing retiree and long-term visitor population. These tend to be resort-quality parks (Clubhouses, pools, pickleball courts, organized activities, etc.) because the snowbird clientele expects amenities for multi-month stays. Despite added supply, demand remains strong – many parks still have waiting lists for peak winter months, indicating undersupply in peak season. For investors, stabilized yields in Arizona can be very attractive: parks oriented to snowbirds often achieve 8%–10% cap rates on in-place NOI, bolstered by the reliable occupancy of repeat seasonal guests. On the tourist side, parks near major attractions (e.g. an RV campground near Sedona or the Grand Canyon) can generate high RevPAR in peak months, though they may close or run very low occupancy in the off-season (e.g. high-altitude parks in winter). Absorption risk in Arizona is mitigated by natural constraints – much of the land is arid or federally owned, and water availability can limit large new developments – meaning those projects that do get built face limited competition nearby. In the long run, Arizona's retiree population growth (the state consistently ranks in top domestic migration) and enduring appeal of its landscapes should drive NOI growth above inflation, contributing to strong long-hold value.

Regulatory Climate

Arizona is generally welcoming to RV park development, with fewer regulatory hurdles than many states. Counties like Maricopa (Phoenix) and Pima (Tucson) have established processes for RV park approvals, and more rural counties often view new campgrounds favorably for the economic boost. Zoning for "commercial recreation" or similar uses is needed, but rezoning is attainable in growth corridors. Developers do need to navigate water and environmental regulations – Arizona's water use is closely watched, so securing wells or city water connections is critical, and some areas have environmental sensitivities (e.g. desert tortoise habitat, archaeology) to clear. Overall though, entitlement timelines are reasonable and there is a track record of projects moving forward, especially when aligned with tourism development plans. Arizona's state government and tourism boards actively promote outdoor recreation, signaling a positive stance toward expanding camping infrastructure.

Segmentation & Dispersion

Class A snowbird resorts dominate much of Arizona's RV park landscape. These are large parks (often 300+ sites) with full hookups and extensive amenities, catering to 55+ seasonal residents; they often operate somewhat like outdoor retirement communities. Such assets, especially if stabilized with high occupancy and annual returning guests, can trade at lower cap rates (even ~8%) given their cash-flow stability and interest from REITs or large operators. On the flip side, smaller transient parks (Class B) near tourist sites might be valued higher (10–12% caps) due to more volatile income and shorter.

Seasonal variation is notable: Southern Arizona (Phoenix, Yuma, Quartzsite) yields very strong winters and shoulder seasons (Oct–Apr), moderate summers; Northern Arizona (Flagstaff, Page) yields strong summers but harsh winters. Some parks in central areas (Sedona, Prescott, etc.) can have two seasons (spring/fall tourism plus mild summer getaways), offering a nice balance. Vintage also matters – Arizona has many older parks from the 1970s-80s era; those that haven't upgraded to accommodate today's larger RVs or added amenities might underperform relative to newer resorts. Investors often find value-add potential in these legacy parks (adding pull-through sites, modernizing hookups, etc. to boost ADR). In summary, Arizona presents an attractive risk-reward profile: high seasonal demand translating to high returns, in a state that encourages outdoor hospitality growth. Prudent underwriting will account for the seasonal revenue patterns (perhaps setting aside reserves from peak season to cover off-season costs), but the annualized returns can be excellent for well-run parks in this state.

4. North Carolina

North Carolina emerges as a top state for RV park development in the Southeastern U.S., reflecting its rich mix of tourist destinations and steady growth in camping popularity. What sets North Carolina apart is the diversity of its appeal – from the mountains to the sea, the state offers multiple distinct destination areas that draw RV travelers:

• Western NC – Appalachian Mountains: The Blue Ridge Mountains and Great Smoky Mountains region (shared with Tennessee) are a magnet for outdoors enthusiasts. Great Smoky Mountains National Park, which straddles NC and TN, saw 13.3 million visits in 2023 (a record high, averaging ~1 million visits per month in summer/fall), making it the most visited national park in the country. Towns on the North Carolina side (e.g. Cherokee, Bryson City) and nearby Blue Ridge Parkway sites see heavy camper traffic spring through fall. Campgrounds here capture vacationers during foliage season, summer hikers, and year-round Blue Ridge Parkway road-trippers.

Central NC – Piedmont & Metro Tourism

Central North Carolina, including areas around Charlotte and Raleigh, isn't a traditional vacation hub, but it benefits from events tourism and stopover traffic. RV parks in the Piedmont can serve travelers en route to the mountains or coast (I-40/I-85 corridors) and cater to events like NASCAR races (Charlotte Motor Speedway) or college sports events, which draw RV tailgaters. The central region also has growing tech and industry, so some parks pick up extended-stay guests (though those parks skew more utilitarian).

Eastern NC – Coastal Beaches & Outer Banks

The Carolina coastline, particularly the Outer Banks and Cape Hatteras National Seashore, is a major summer destination. Families from the Mid-Atlantic and Southeast drive to the Outer Banks for beach camping and fishing – several large campgrounds (including national seashore sites and private resorts) operate at capacity all summer. Further south, beach towns and barrier islands (Wrightsville Beach, Emerald Isle, etc.) also see strong seasonal demand at RV parks. Even inland eastern NC has draw; for instance, around lake regions or stops for snowbirds moving along I-95 (some snowbirds break their journey in NC in fall/spring).

This multifaceted tourism means North Carolina can support various types of RV parks. Demand indicators are very positive: the Carolinas as a region have seen growing RV travel and tourism in recent years. Private campground operators report rising occupancy and the KOA annual survey notes the Southeast had one of the highest increases in new campers since 2020. North Carolina in particular benefits from being within a day's drive of huge population centers (the Mid-Atlantic, Northeast, and Midwest feeders), which has made it a popular "drive-to" vacation state – an important factor in the era of high fuel prices, as many choose closer regional trips.

Development Climate

North Carolina's regulatory climate is moderately favorable for RV park development. While more structured than frontier states (e.g. there will be zoning and environmental reviews), many counties, especially those with established tourism economies (mountain and coastal counties), are open to new campground proposals. Local tourism boards often welcome added capacity given the economic impact of more visitors. For example, coastal counties have accommodated new RV resort projects when aligned with development guidelines (though hurricane-related building codes must be followed). Mountain counties can be stricter on environmental impact (slope, tree clearing, etc.), but projects that are sensitively designed often gain approval as they support the all-important tourism industry. North Carolina also has an SBA-friendly profile – many projects have utilized SBA or USDA loans, meaning feasibility studies and business plans are familiar to lenders in this state. One consideration: seasonality in NC is more pronounced than FL/TX – a new park must plan for slower winters (mountain parks may shut down in deep winter months due to weather). However, developers mitigate this by offering multi-use accommodations (e.g. adding cabins or glamping units to attract off-season visitors) and by tapping into local events to extend the season.

Segmentation & Dispersion

North Carolina exhibits dispersion in park types and performance based on location and asset class. Class A destination parks in NC might include upscale mountain resorts near Asheville or luxury RV resorts on the coast. These can achieve strong ADRs (e.g. coastal RV resorts often charge $100+/night in peak summer) and high occupancy during their season, though off-season occupancy might drop sharply. Investors will price these assets with an eye on the robust peak cash flows; a coastal resort might trade around a ~9% cap on normalized NOI, balancing the stellar summer income against winter vacancy. Class B family campgrounds (perhaps older facilities or state park-adjacent campgrounds) might have slightly fewer amenities and charge lower rates, trading around 10–11% cap rates to entice buyers. Class C or vintage parks in NC (like a decades-old campground with minimal updates) often have significant upside if modernized – these may currently operate at low rates/occupancy and thus could be acquired at very high cap rates (12%+), then improved. Within the state, the mountain vs. coastal split is key: Mountain parks (NC side of Smokies, Blue Ridge) have a shorter but intense season (late spring to autumn); coastal parks have a long summer season and shoulder spring/fall (but also some winter monthly snowbird stays on the southern coast). The Piedmont parks (around cities) might have more steady, albeit lower, throughput and often cater to a mix of overnighters and semi-residential users. This variety means developers can choose a market type that fits their strategy: a high-end seasonal resort with premium pricing, or a more steady year-round operation with lower highs but less extreme lows. In all cases, North Carolina's rising profile in outdoor travel and its healthy economy suggest that new RV parks can achieve both competitive yields and long-term appreciation. Land values in tourist areas have been climbing, so securing sites sooner than later is wise – those who invested in Outer Banks campground land a decade ago, for example, have seen significant value gains. Going forward, NC's blend of natural beauty and accessibility will likely keep it among the top RV destinations in the East, supporting developers' pro formas with a solid demand trajectory.

5. Tennessee

Rounding out the top five is Tennessee, a state that punches above its weight in tourism draw and revenue potential for RV parks. Tennessee's standout attribute is its status as home to some of the busiest tourist attractions in the U.S. – notably the Great Smoky Mountains National Park (on the TN/NC border) and the surrounding Dollywood/Pigeon Forge/Gatlinburg resort area, which together form a mecca of family tourism. The Smokies region is an RV camping powerhouse: on the Tennessee side, towns like Pigeon Forge, Sevierville, and Gatlinburg host numerous large campgrounds, yet still see demand outstripping supply during peak months. The national park's record ~13 million visitors in 2023 (and ~12 million+ annually over the past decade) underscores the sheer scale of visitation. Many of those visitors are road trippers and RVers. During summer and fall foliage, RV parks in this region report occupancy near 100%, and weekends often sell out well in advance. Developers have taken note – recent projects include upscale RV resorts and glamping campgrounds in the Smokies corridor to cater to the overflow of visitors seeking unique stays. This high demand, high ADR environment can lead to excellent returns: a well-run RV resort in the Smoky Mountains can command premium nightly rates (especially if offering cabins or unique amenities alongside RV sites) and enjoy a long peak season from April through October. Stabilized cap rates in this area can be in the high single digits (~8–9%) given the strong income, and value appreciation is bolstered by the ever-increasing popularity of the region.

Beyond the Smokies, Tennessee has other tourism drivers contributing to RV park success. Middle Tennessee, around Nashville, draws a different crowd – music and culture tourists, plus large events (CMA Fest, concerts, sporting events). Several RV parks near Nashville cater to these visitors (and to touring RVers passing through this centrally located city). While Nashville-area parks operate more like urban RV parks (steady flow of short-term guests year-round, plus some long-term), they benefit from the region's booming tourism (Nashville welcomed ~14.4 million visitors in 2022, pre-2023 data) and can maintain solid occupancy. West Tennessee has more limited tourist traffic, but destinations like Memphis (with Graceland and music history) still draw RV road-trips, and parks along interstates catch cross-country travelers. Additionally, parts of Tennessee see specialty demand – e.g. Bristol in NE Tennessee for NASCAR races (huge temporary influx of RVs), or Chattanooga with its outdoor attractions and Civil War sites. These contribute niche demand bursts that a savvy operator can capitalize on.

Regulatory & Business Climate

Tennessee, much like Texas, is known for a pro-business environment. There is no state income tax, and regulations on land development are relatively light outside of metropolitan areas. In tourism-centric counties (Sevier County for Smokies, etc.), local governments generally support campground development, as tourism is the lifeblood of the economy. Zoning can be navigated – many areas have existing campground zonings or are willing to grant special use permits for RV parks. The entitlement process is not as onerous as in some states; for example, environmental review is straightforward if the site isn't near protected streams or habitats (much of TN land is not overly restricted). This friendly climate, combined with relatively low property taxes, improves project feasibility and long-term operating margins. Access to financing is also aided by Tennessee's track record: lenders have seen strong performance of campground assets in TN, making them more comfortable with new projects (with a proper feasibility study in hand).

Segmentation & Dispersion

Tennessee's RV park market can be segmented into destination resort parks vs. transient/stopover parks. The destination Class A parks (especially Smokies area and a few around Nashville/Chattanooga) offer extensive amenities and experiences – for example, some Smoky Mountain RV resorts have water parks, lazy rivers, and organized activities to keep families entertained. These can achieve high revenue per site and are often targets for consolidation by larger operators, hence they might trade at cap rates on the lower end (around 8%, reflecting lower perceived risk when stabilized). In contrast, simple highway-adjacent parks serving travelers off I-40 or I-24 are more like overnight campgrounds; they may have higher caps (11%+) and depend on consistent transient flow rather than vacationers staying a week. Between those poles are mixed-use parks (Class B) that might host seasonal campers for part of the year and transient guests the rest – common around less touristy areas – and those typically see mid-range cap rates ~10%. Vintage dispersion: In the Smokies region, there are many older legacy campgrounds (some with decades of operation). If well-maintained, they continue to perform, but some have not expanded to meet modern demand (e.g. able to handle 45-ft "big rig" RVs or offer luxury amenities).

New developers are seizing this gap – by building state-of-the-art facilities that charge more, effectively raising the market's rate ceiling. This suggests a healthy long-term outlook: as consumer expectations rise, newer parks can capture premium positioning, while older parks either reinvest or potentially become acquisition targets. Across Tennessee, the yield profile for new developments is enticing. Land costs are moderate (especially compared to coastal markets) and construction costs, though higher than a few years ago, are offset by strong pro forma income. Many developers target a 10%+ yield on cost in Tennessee by stabilization, given that exit cap rates in the state are generally projected around 8.5–9.5%.

With tourism growth (the Smokies region keeps breaking visitation records) and relatively constrained supply in key areas (mountainous terrain and the National Park limit available land near prime spots), the long-hold value is likely to grow. Owning a campground near a perennial attraction like Dollywood or a major national park can be akin to owning "trophy" real estate in this sector. In summary, Tennessee offers developers and lenders a compelling mix of high tourist throughput, supportive business conditions, and strong financial performance metrics – solidifying its place in the top 5.

Segmentation by Asset Class, Market, and Vintage

When evaluating opportunities in these top states, it's crucial to recognize the dispersion of performance within each state by asset class (A/B/C quality), market type (urban vs. resort vs. rural), and park vintage (new vs. older). Not all RV parks are created equal – a Class A resort in a prime location will underwrite very differently than a basic rural campground – even if they're in the same state.

Below we break down these segmentation factors and how they influence cap rates, returns, and risks:

Asset Class (Quality and Amenities)

Class A RV parks are modern, amenity-rich resorts. They offer features like pools, clubhouses, paved pads, full hookups, Wi-Fi, event programming, often gated access – essentially a "resort" experience. These parks attract more affluent guests, achieve higher occupancy and rates, and are often professionally managed. Investors consider them lower risk within the sector, which is reflected in lower cap rates (often 8–9% range) and high buyer demand (including institutional buyers/REITs). For example, a newly built Class A park in Florida or Texas with strong bookings might trade around an 8% cap due to its stable cash flow and growth prospects.

Class B parks are mid-grade – decent locations and some amenities, but perhaps older or less extensive offerings (e.g. maybe a pool and bathhouse, but not a full water park or spa). They cater to middle-market travelers; occupancy can be strong but usually not at the rate levels of Class A. Cap rates for Class B are mid-range (perhaps ~10%) to reflect slightly higher risk or upside needed.

Class C parks are budget or no-frills properties – minimal amenities beyond hookups and basic facilities, often older and family-run. These parks might primarily serve overnight transients or budget campers. They typically transact at higher cap rates (often 11–12% or more), as their income might be lower and more volatile, and significant improvements may be needed to unlock value.

Market Type (Location – Urban vs. Destination vs. Rural)

Market context heavily impacts performance. Destination/Tourism Markets (e.g. coastal beach towns, mountain resort areas, theme park corridors) tend to allow higher pricing and fuller occupancy in season. Parks located here can be top performers but also may have pronounced seasonality. In underwriting, one might use a somewhat lower cap rate assumption if the location is trophy-grade (because of high demand and barriers to entry), but also carefully model the off-season.

Urban/Suburban Markets near large cities often see a different demand profile: more short visits, some long-term workforce or residential stays, and less "vacation" atmosphere. These parks might have steadier year-round occupancy (especially from long-term renters), but at lower daily rates, and they face competition from other housing options. They also can be impacted by municipal restrictions (some cities limit RV park development or impose design standards). Urban parks, if stable, can attract investors as a hybrid of housing/hospitality, trading at moderate cap rates (~9–10%).

Rural/Interstate Markets are typically the roadside parks that capture travelers in transit. They rely on highway visibility and easy access. Occupancy might be one-night stays at 50–70% average, with peaks during holiday travel periods. These parks face the most competition (any exit could have one), and their guests are price-sensitive, so revenue growth is modest. As such, rural transient parks often need higher going-in yields to justify investment (caps 10%+).

It's worth noting that within the same state, these market types can yield very different financial results – for instance, a rural park in West Texas might need a 13% cap to entice a buyer, whereas a destination resort in the Texas Hill Country might clear at 8.5%. Investors and lenders should adjust expectations according to market type, not just state averages.

Vintage and Infrastructure

The age of the park and its infrastructure condition also cause performance dispersion. Many existing RV parks are decades old (built in the 1970s-90s). Older vintage parks often have smaller sites (not built for today's 40-ft RVs), outdated utilities (30-amp electric, less robust septic), and fewer amenities. This can limit the rates they can charge and the customer segment they attract. Such parks might underperform their market's potential until upgraded.

Accordingly, older parks typically trade at higher cap rates to reflect deferred maintenance and upgrade costs – but they can be turnaround opportunities. Newly built or recently renovated parks have a competitive edge: modern site layouts (big-rig friendly, pull-throughs), high-speed internet, solar lighting, EV charging stations, contemporary bathhouses, etc. Guests are often willing to pay a premium for these comforts, and the parks tend to get better reviews and loyalty.

New parks in top markets can thus achieve higher NOI margins and growth. From a valuation perspective, a new Class A park might sell for a lower cap rate (higher value per NOI dollar) than an older peer in the same location because buyers see less immediate capex and stronger forward earnings. For example, a 2023-built resort in Arizona with top-notch facilities could trade at 8% cap, whereas a 1980s-built park down the road with no upgrades might only attract a 11% cap offer. Dispersion within States: Each of the top states has a spectrum of old and new. Florida and Arizona have many older parks that have not kept up – these present opportunities but also have wider performance variance (some thrive due to location despite age, others struggle). Texas and the Carolinas are seeing new supply elevate standards; thus, older parks risk falling behind unless updated. In Tennessee's Smokies, a number of older campgrounds still do very well due to location, but newer entrants are capturing the higher-end campers. Lenders often evaluate vintage by looking at the last five years of EBITDA or NOI trend – a park with consistent growth and reinvestment may earn a tighter cap rate than one with flat or declining performance because it signals good management and infrastructure. Indeed, as a CBRE valuation note highlights, strong EBITDA performance over the past 5+ years can justify a lower cap rate for an RV park, since it demonstrates stable income and effective operations.

In summary, segmenting by class, market, and vintage is essential when analyzing RV park investments. A prudent approach is to benchmark within the segment: compare a Class A resort's metrics to similar high-end resorts, not to the state average that may be skewed by older parks. This segmentation explains why cap rates for RV parks are often quoted as a range (say 8% to 12%) – the low end of that range corresponds to high-quality assets in prime markets (or portfolios with scale), and the high end to aging properties or those in thin markets. For a feasibility study or lender underwriting, it's wise to run scenarios for where a subject property might fall in this spectrum and justify the chosen cap rate and projections with segmented comps (see next section on cap rate selection methodology). Ultimately, recognizing these intra-state differences helps investors avoid over-generalizing (e.g. "Florida parks are 8% caps" – some are, some aren't) and instead focus on the specific risk/return profile of the target opportunity relative to its true peer set.

Cap Rate Analysis for RV Parks

Valuing a ground-up RV park (or any income-producing real estate) hinges on the capitalization rate, which links NOI to value. For lender-grade analysis, it's important to dissect the cap rate in context of current interest rates, risk premiums, growth expectations, and market liquidity. Below we detail how these factors come into play for RV parks in 2025, and outline a methodology for selecting and adjusting cap rates using data from comps and investor surveys:

1. Risk-Free Rate Baseline

Cap rates generally start with the risk-free yield as a baseline, typically the 10-year U.S. Treasury yield. As of early 2025, the 10-year Treasury hovers around 4%. This is significantly higher than the ~1.5–2% levels of 2020, and it has put upward pressure on cap rates across all real estate. The cap rate must offer a spread above the risk-free rate to attract investors to a riskier asset. Historically, commercial real estate cap rates carried a 3–5% spread over Treasurys to compensate for risk and illiquidity. For RV parks – which are arguably riskier and less liquid than core property types – the required spread is often on the higher end of that range. Indeed, if Treasurys are ~4%, and investors demand say a 5%+ risk premium, we get a baseline cap rate of ~9% (before considering growth). This aligns with observed market cap rates for RV parks in 2024–25. When risk-free rates rise, as they have, either cap rates also rise or the spread compresses. In 2022–2023, many buyers initially still paid low cap rates despite rising Treasurys, compressing spreads to historically thin levels (<100 bps in some cases) – a red flag for lenders. By late 2023, the market adjusted: cap rates expanded to restore a more normal spread, contributing to lower property values in the RV park sector. For our analysis, we assume the 10-year stays in the 3.5–4.5% range through 2025. The risk-free component thus underpins roughly one-third to half of an RV park's cap rate in the current climate.

2. Credit and Operational Risk Premium

RV parks carry higher income variability than, say, an apartment or net-leased asset. Occupancies can fluctuate with the economy or fuel prices; revenue is nightly/weekly (hospitality-like) rather than locked in long-term. Thus, investors demand a credit risk premium on top of the risk-free rate. This premium compensates for the chance that cash flows underperform (due to fewer guests, natural disasters, etc.). Analysts often analogize it to a bond's default spread – for example, a BBB corporate bond historically had ~2–3% higher yield than Treasurys as compensation for default risk. For real estate, that 2–3% can be seen as the baseline for income uncertainty. On RV parks, which have shorter leases (daily rentals), that premium might be a bit higher, perhaps 3–4% for a solid park and more for a very remote or unproven park. Additionally, an illiquidity premium of ~1–2% is typically embedded – selling an RV park is not as quick or certain as selling stocks or bonds, so investors insist on extra yield. Combined, these risk premia often sum to ~4–6% (credit + illiquidity + other idiosyncratic risks) for an asset like an RV campground. If we add that to the risk-free 4%, we get a raw cap rate of ~8–10%. This is indeed the range we see investors targeting for RV parks in 2025 (roughly 8–10% cap rates), with variation based on quality and location. Better parks in strong markets might be at the low end (implying a somewhat lower risk premium), whereas tertiary-market parks or those with unstable finances might need the high end (risk premium closer to 6% or more). It's worth noting that as lender underwriting grows more conservative, some lenders effectively increase the required risk premium for certain assets – for example, by underwriting to a higher cap rate or lower LTV. We discuss that in the debt section, but essentially, in 2024 lenders started assuming higher vacancy or lower growth, effectively baking in an extra cushion which influences the cap rate a buyer can pay.

NOI Growth Expectations

A critical offset in cap rate analysis is expected NOI growth. If investors foresee that a property's income will grow significantly, they may accept a lower cap rate today, anticipating future earnings will "grow into" the value. Conceptually: Cap Rate ≈ Risk-Free + Risk Premium – Expected NOI Growth. For RV parks, what are growth expectations? Pre-pandemic, this was a slow-growth sector (~2% annual revenue growth was common). But the pandemic outdoor recreation boom reset many parks to higher occupancy/ADR levels. Going forward, many investors still model 2–3% annual NOI growth for well-located parks (roughly inflation-level, driven by modest rate increases and sustained demand). In certain high-growth corridors (e.g. Florida, where in-migration is huge), investors might pencil in higher growth in the near term (5%+ for a few years) then normalize it. If we assume ~2% long-term NOI growth, that effectively reduces the cap rate by 2% in the formula. For example, using the earlier risk components (4% Treasury + ~5% risk/illiquidity = 9%), minus ~2% growth gives ~7%. Interestingly, during times of high inflation with rising camping rates, some RV park deals traded at surprisingly low caps because buyers expected rents/revenues to climb quickly to justify the price. However, one must be cautious: overly optimistic growth projections can lead to overpaying. Lenders typically underwrite more conservatively, often capping growth assumptions at inflation or using trailing-twelve-month income if growth has been rapid.

For our top states, it's reasonable to expect above-average demand growth (due to demographics and popularity of RV travel), which is supportive of slightly lower cap rates than otherwise. But given the currently high financing costs, we are not seeing cap rates drop too low yet. In practice: a prime park might sell at 8% cap because the buyer expects NOI to rise, meaning their yield-on-cost might become 9–10% after a couple years. Conversely, if growth prospects are poor (say a park in an area with declining tourism), the cap rate will be higher to compensate (and some lenders might even add a "negative growth" premium if they think NOI could fall).

Market Liquidity and Buyer Pool

RV parks have historically been a niche asset class, dominated by private mom-and-pop owners. However, the past decade saw increasing institutional and PE interest (Sun Communities, Equity LifeStyle Properties (ELS), and others expanded their RV resort portfolios). This increased liquidity for high-end parks and compressed cap rates somewhat in that segment (as more buyers competed). For instance, a portfolio of destination RV resorts might garner multiple offers from well-capitalized groups, pushing pricing up (cap rate down). On the other hand, a small rural campground might have very few interested buyers, requiring a juicy cap rate to attract attention. The liquidity premium ties back to risk – an illiquid asset demands a higher return. Currently, market liquidity for RV parks has pulled back compared to 2021 (when cheap debt and pandemic fervor drove a frenzy). By late 2024, transaction volume was down ~80% year-over-year for RV parks, per brokerage reports. Buyers became more selective and some sellers pulled listings. This illiquidity pushes cap rates upward as well – a buyer today might insist on a higher cap knowing resale could be tougher in the short term. We have empirical evidence: a leading RV brokerage noted their parks sold in 2024 averaged a 9.3% cap rate (with ~9 months on market) versus ~8% average in prior hot years. This suggests cap rates rose 100–150 bps in the past 18 months due to the interest rate shock and thinner buyer pool. We incorporate this into our analysis by using higher cap rate assumptions for valuation than we might have in 2021. As lending conditions ease and if more buyers return (some are sitting on dry powder waiting for stability), liquidity could improve, possibly compressing cap rates again for quality assets. But a prudent stance for 2025 is to assume no significant cap rate compression – i.e. use a cap rate that maintains a healthy spread over current debt costs and accounts for moderate liquidity risk.

Lender Underwriting Conservatism

Finally, we consider how lenders influence cap rates indirectly. Lenders don't set cap rates, but their requirements (DSCR, loan constants, appraisals) effectively limit how low a cap rate can go for a leveraged buyer. If a property is priced at too low a cap (too high a value) relative to its cash flow, the buyer may not get enough debt to hit their return targets. In 2024–25, lenders have been quite conservative on RV parks: many require 1.25× DSCR or higher and underwrite using higher interest rates than before. For example, if the interest rate is 7% and a 25-year amortization, the loan constant is ~8.5% (the annual debt service as a percentage of loan principal). With a 1.25 DSCR, the property's going-in cap rate realistically needs to be above ~8.5% just to cover debt service comfortably on an 70–75% LTV loan. If the cap rate is much lower (say 7%), either the DSCR won't be met (meaning the loan amount will be cut, requiring more equity) or the deal fails to pencil for the buyer's cash-on-cash goals. This dynamic has been pressuring prices downward: buyers know if they pay a high price (low cap), they'll only get, for instance, 50–60% LTV from the bank, which drags down their levered IRR. Thus, they bid lower (higher cap) to compensate. Lenders also often use higher cap rates in appraisals to be safe, which can cap the loan amount. For example, a bank's appraiser might value a park at a 10% cap even if market comps are 9%, just to ensure they aren't over-exposed – the borrower then can't finance above that appraised value, again forcing discipline on price. Essentially, today's debt costs set a floor on cap rates. Many in the industry note that the spread between interest rates and cap rates got uncomfortably slim in 2022–23, and the correction in 2024 (cap rates rising ~100+ bps) was a re-normalization. Now, in 2025, we're generally seeing deals underwrite with cap rates equal to or exceeding the borrowing rate. Positive leverage (cap rate > interest rate) is once again expected. In practical terms, that means if interest is ~7%, most buyers want cap rates of 8%+ on deals (and lenders often want even higher for buffer). We factor this into our recommended cap rates for the top states: even in Florida or Texas, where demand is stellar, a new development's stabilized exit cap should be assumed at least in the high-7s or low-8s to be conservative in the current climate. One can always hope for cap rate compression if rates fall, but underwriting at a realistic cap ensures the project is not predicated on rosy refinancing scenarios.

1. Selecting and Adjusting Cap Rates – Methodology:

Given the above factors, how should one practically determine an appropriate cap rate for a feasibility analysis or valuation? We recommend a multi-pronged approach:

1. Survey Recent Comps: Look at recent sales of comparable RV parks in the region or similar markets. For example, if developing a new destination park in Tennessee, gather data on sales of other Smoky Mountain RV parks or similar Southeast resort parks. Note the cap rates (if reported) or derive them from sale price and NOI. Keep in mind many campground sales are private, so data might come from brokerage listings or industry contacts rather than public records. If exact cap rates aren't available, price per site and occupancy can give clues (and one might reverse-engineer an implied cap). In states where prices aren't disclosed, sometimes reaching out to brokers or new owners for guidance is worthwhile. Comps provide ground truth of what investors are currently paying. When analyzing comps, adjust for differences: if the comp park is superior (location, amenities) compared to yours, you might add 0.5–1% to the cap for your valuation to account for the higher risk. Conversely, if your project will be brand-new and higher quality than a comp, you might justify a slightly lower cap than the comp traded at. For instance, if older parks sold at ~10% cap in a given area, a new state-of-the-art project might be underwritten at, say, 9% due to its competitive advantage.

2. Investor Surveys & Industry Benchmarks:

Incorporate data from investor surveys (like CBRE's Cap Rate Survey, PWC's Emerging Trends, or niche publications). While these often focus on mainstream property types, they sometimes include or can be extrapolated to specialty lodging. Notably, a recent CBRE analysis of specialized assets noted that overnight campgrounds typically cap between 9% and 13%, with the range reflecting operational intensity and higher cash flow volatility. Publications like RV Park University also corroborate that 2025 RV park cap rates tend to fall in the 8–12% range. Knowing these broad ranges helps set expectations for lenders and investors who may be less familiar with the asset class. Additionally, if there are REIT investor presentations or earnings reports from Sun Communities, ELS, etc., they sometimes mention implied cap rates on acquisitions or portfolio yields, giving a sense of where the top-tier assets trade (often on the lower end of the range). In the absence of direct survey data on RV parks, one can also look at analogous asset classes: for example, manufactured housing communities (mobile home parks) trade at very low caps (~5–7%) because of stable income, whereas limited-service hotels trade higher (~8–10%+). RV parks combine elements of both, so not surprisingly their cap rates are in between. Understanding that context can help justify to a credit committee why you chose, say, a 9% cap: "this reflects the middle of the typical range for transient RV parks, which carry higher expense ratios and shorter leases than mobile home parks, thus requiring a higher cap rate".

3. Band of Investment (Debt/Equity Analysis):

Another practical method is the band-of-investment approach – derive the cap rate from the weighted cost of capital. For a development or acquisition, determine a reasonable financing structure (loan-to-value and cost of debt, plus required equity return). For instance, assume 70% debt at a 8% loan constant, and 30% equity targeting a 15% IRR. The blended cap rate = (0.70 * 8%) + (0.30 * 15%) = 5.6% + 4.5% = 10.1%. This indicates that if investors need 15% returns and debt is costly, the deal would only make sense at around a 10% cap. If that is much higher than market comps, something might be off (maybe the IRR target is too high or the project's risk is perceived as high). Alternatively, if market comps suggest an 8.5% cap but your band calc is 10%, it implies either you need to lower leverage or the project might not be viable unless returns expectations adjust. Many developers use a simplified version: ensure that cap rate ≥ debt constant and that the spread between cap and debt constant, when leveraged, yields an acceptable cash-on-cash. In 2021, low interest meant even a 6% cap could be leveraged and still produce positive leverage; in 2025, as noted, an 8% cap with a ~7% interest rate barely produces neutral-to-slightly positive leverage after DSCR. Thus, to get, say, a 10% cash-on-cash return at 70% LTV, one might need a cap rate of ~9.5–10%. Using this methodology can justify cap rate assumptions in a feasibility study: e.g. "Given a loan constant of 8.8% and equity hurdle of 15%, we estimate the required cap rate at ~9.5% to satisfy all capital providers. Therefore, our pro forma exit cap of 10% is conservative and allows for financing contingencies."

4. Adjust for Growth and Stabilization Timing:

If valuing a development, consider when the project will stabilize (reach steady NOI) and what the interest rate environment might be. You might select an exit cap rate a few years out that is slightly higher than today's to allow cushion (say current market cap is ~9%, use 9.5% for exit in 3 years to be safe) – unless you strongly believe rates will fall. Also, if your project will start with lower occupancy and ramp up, the "going-in" cap (year 1) will be low, but that's less relevant; what matters is stabilized cap. Lenders often underwrite to stabilized NOI but will look at interim DSCR too. If you are using comparables from fully stabilized sales, ensure your project's stabilized year NOI is used for cap calc.

Additionally, look at NOI margin and expense ratio differences. RV parks can have expense ratios from 35% up to 50%+ of gross revenue. A park with a very high expense ratio might appear to have a high cap rate (cheap price relative to gross income) but low profit margin – that could signal management inefficiency or just the nature of a highly amenitized park. Investors might accept a slightly lower cap for a park with lower expenses (more efficient operations) because more of each revenue dollar is profit. So, adjust cap rates if needed for substantial differences in operating model (e.g. parks with lots of amenities might have higher expenses but also justify higher rates; one must evaluate net figures consistently).

Conclusion (Cap Rates)

In 2025, a reasonable cap rate range for a stabilized destination RV park in the top states is roughly 8% to 10%, with ~9% as a midpoint. We defend this with the fact that parks have been selling around 9–10% on average recently and industry benchmarks place transient campground caps in the high single to low double digits. For the highest-quality assets in the strongest markets (e.g. a new Florida Keys RV resort), cap rates could be on the lower end or even high-7s if there's strategic buyer interest. Conversely, for secondary locations or parks with more uncertainty, underwriting at 10–11% may be prudent. Ultimately, the cap rate should be supported by both market evidence and analytical justification, as we've outlined. It's also wise to sensitivity-test values to cap rate shifts (e.g. what if exit cap is 1% higher or lower?) – which leads into the scenario analysis for 2026.

Debt and Financing Considerations

The financing environment in 2025 plays a pivotal role in RV park feasibility. Higher debt costs and stricter lending standards are directly affecting how developers price deals and how buyers evaluate acquisitions. Here we discuss key debt metrics – DSCR constraints, loan constants, and the impact of elevated interest rates – and how these factors are pressuring development pricing and returns:

DSCR Constraints

Lenders typically require a Debt Service Coverage Ratio (DSCR) of at least ~1.25× on RV park loans, sometimes higher (1.30–1.40) if they view the asset as hospitality-like. This means the stabilized NOI must be 125%+ of annual debt service. For new developments, lenders will often size the permanent loan based on projected stabilized year NOI and a required DSCR. In practical terms, DSCR constraints often limit the loan amount such that the leverage is lower than the maximum LTV cap. For example, even if a lender says they'll go up to 70% LTV, if the NOI/DSCR test only supports 60% LTV, that's all the loan you get. With today's higher rates, this is common. A quick illustration: suppose a park is projected to stabilize at $1,000,000 NOI and the lender requires 1.3 DSCR. If interest rate is 7% on a 25-year amortization, annual debt constant ~8.5%, then the maximum loan supported by DSCR = NOI / (DSCR × constant) = 1,000,000 / (1.3 × 0.085) ≈ $9.05 million. If the project's value (or cost) is $12 million (which would be a 8.33% cap on $1M NOI), $9.05M is about 75% LTV – workable. But if the value were higher (lower cap rate), say $15 million (6.7% cap), that same $9M is only 60% LTV; the developer would need 40% equity to meet DSCR. Many investors aren't willing to go that high in equity or accept the low returns that come with it. So DSCR is effectively telling the sponsor what cap rate they need to buy/build at to make the numbers work with reasonable leverage. This is why deals now are being underwritten at higher cap rates versus a couple years ago – to ensure DSCR compliance. Lenders also test DSCR in downside scenarios (e.g. +100 bps interest or 10% lower NOI), so developers are wise to leave some cushion (underwrite maybe 1.4 DSCR on base case) to pass these stress tests.

Loan Constants and Positive Leverage

The loan constant (annual debt service as a % of initial loan) is a handy figure to compare against the cap rate. As mentioned, at 7% interest/25-year amort, constant ≈ 8.5%; at 6%/25yr, ~7.7%. Ideally, one wants the cap rate > loan constant for positive leverage (so that after paying debt, there's cash flow left). In late 2022 and 2023, many real estate sectors experienced negative leverage (cap rates below loan constants), meaning equity returns got squeezed. For RV parks, because cap rates are higher to start, many deals still maintained slight positive leverage, but the margin thinned. With interest in the 6–7% range and cap rates roughly 8–10%, the leverage benefit is minimal – it might add 1–3% to cash-on-cash returns at 70% LTV. If cap rates were to compress to equal the loan constant, leverage adds no benefit; if they went below, it actually hurts returns unless offset by growth. Thus, higher debt costs have forced both buyers and appraisers to re-evaluate cap rates upward. A developer today might say: "I won't do this project unless I can get a 10% yield on cost (cap rate) because my loan constant is ~8.5% and I need some spread for profit." Likewise, lenders might decline to finance a deal that's projecting a 6–7% cap on cost, because they know debt coverage would be inadequate. The loan constant essentially sets a floor on viable cap rates: e.g. if typical loan constant is ~8.0–8.5%, realistically you need a cap at or above ~8.5% at stabilization to comfortably meet DSCR at a decent LTV. In our top states analysis, this is one reason we favor states that can achieve those yields (like Florida, Texas, etc. The market rents and occupancy can support 9–10% yields, whereas a state with weaker demand might only support a 6–7% yield, which under current debt conditions would be very tough to finance.

Higher Debt Costs & Impact on Pricing

The cost of capital for development has risen on all fronts – construction loans are more expensive, perm loans are in the high single digits, and even equity expects a higher return to compensate for volatility. This has a direct impact: developers must either negotiate lower land/prices, increase projected income, or accept lower returns. In practice, many are pushing back on land prices or backing out of deals that don't pencil at higher cap rates. Sellers of existing parks have had to reduce prices as well; an RV park that might have sold for $10M at a 8% cap in 2021 might need to be marked down to $8.5–9M (10–11% cap) in 2024 to attract buyers, according to brokers' reports. The spread between buyer and seller expectations has been a challenge – with some sellers unwilling to drop price and buyers unable to raise theirs given financing constraints, leading to stalemates.

For new developments, higher interest rates increase the carry cost during construction and ramp-up. Projects that looked great in 2021 pro formas with 4% interest are now struggling at 8%. Some developers have paused or canceled projects mid-stream when refactoring costs. One investor noted, "High interest rates have put the brakes on some acquisitions of development land or expansion projects if the margins were already slim."

Lenders too are selective: they may require feasibility studies, higher pre-leasing or pre-sales of seasonal sites, or stronger guarantor backing now. All of this means that to proceed, a development in 2025 must show a really compelling story (location, demand) and financial buffer. Thus, we see an emphasis on the top states/markets – capital is still available for "A-plus" locations (like our ranked states) where underwriters can get comfortable with long-term performance, whereas marginal projects in fringe areas likely won't get financed in this environment.

Loan Terms – Amortization, LTV, and Structure

Another way higher debt cost is managed is through loan terms. Amortization periods might be stretched (if possible) to 25–30 years to lower annual payments (life companies and SBA loans, for instance, offer 25-year fully amortizing, which can help DSCR). Some lenders might allow interest-only periods during lease-up for new parks to ease the early years (common with SBA 7a/504 or certain bank loans). However, most banks still keep relatively short terms (5-10 year terms with balloons), which introduces refinance risk if rates remain high. LTVs have tightened a bit – where 75% was common, some lenders cap at 65–70% now for hospitality-like assets, unless it's SBA which can go higher but with strict criteria. Lower leverage means the borrower must inject more equity, which again forces the project to have a higher projected return to satisfy the equity. We are thus seeing creative capital stacks: some developers using mezzanine debt or pref equity to bridge the gap, albeit at high cost, or seeking USDA loans which can go to $25MM and 30-year terms for rural projects. The USDA and SBA routes are actually bright spots – these government-backed loans have somewhat softer rates (maybe 6–7%) and longer terms that improve feasibility. They do require solid feasibility studies and job creation metrics, but many RV park projects in rural areas qualify. A lender or consultant reading this would want to ensure all these financing options are considered in the plan, especially if conventional bank loans are too restrictive.

Developer and Buyer Pricing Strategies

Given the debt constraints, developers are adjusting their pricing and exit strategies. Many now build in a higher cost contingency and interest reserve to their budgets, knowing that interest during construction might be high and unpredictable (floating rates on construction loans have spiked with Fed rate hikes). They are also negotiating harder on land – in some cases walking away if the seller won't budge, as paying yesterday's price with today's rates kills the IRR. On the buy side, purchasers are insisting on higher cap rates or seller financing to make deals work. There are instances of seller carry-back loans at lower rates to facilitate a sale, effectively the seller accepting a higher price in exchange for a below-market interest on a portion – a creative way to bridge the financing gap. Developers and investors are also re-evaluating their hold horizon: some who planned to flip in 3 years are now underwriting a longer hold (5-7+ years) to ride out the high-rate environment, focusing on long-term value rather than short-term exit. This aligns well with the idea of long-hold value in our top states – the fundamental demand is there, so holding through a rough patch can still yield great returns once financing normalizes.

Impact on Cap Rate & Value (Recap)

Tying back to cap rates, one can succinctly say: rising interest rates = rising cap rates = lower values (all else equal). We saw this in 2024 and it remains a factor in 2025. For lenders, this means loan-to-value ratios have to be monitored – collateral values might have dipped. For developers, the onus is on demonstrating why their project can achieve target NOI even with conservative exit cap assumptions (e.g. use a cap rate +50–100 bps higher than today to be safe). If the deal still yields a solid IRR under that scenario, it's probably a winner. If it only works assuming cap rates compress or interest rates drop, that's a red flag in underwriting.

Many pro forma models now include sensitivity tables (matrix of cap rates vs. NOI outcomes) explicitly to satisfy investment committees and lenders that the project isn't a narrow success case. Including such sensitivity (e.g. showing DSCR and return if cap is 0.5% higher than base) strengthens the defensibility of the analysis.

In conclusion on debt

The cost and availability of financing in 2025 is a constraining factor that effectively forces discipline in RV park development deals. Projects in the top 5 states have an advantage – their robust cash flows can meet lender metrics more readily – but even in these markets, careful financial structuring is needed. Developers should optimize for DSCR (perhaps moderate initial leverage to ensure coverage, then refinance later if rates improve) and consider alternative financing (SBA/USDA) to lock in longer terms. Lenders will be looking closely at break-even occupancies, interest reserves, and sponsor experience given the tighter margins. The upside is that those projects that do clear the debt hurdle are likely truly solid deals with sensible pricing, which bodes well for their long-term success once stabilized.

Practical Cap Rate Selection & Adjustment Methodology

Selecting the right cap rate for valuation or underwriting is both an art and a science. We've discussed the factors conceptually; here is a practical step-by-step methodology a feasibility consultant or lender can use, referencing comps and surveys, to ensure the cap rate (and by extension, value) chosen is defensible:

1. Gather Comparable Sales Data: Identify at least 3–5 comparable RV park sales in the last 12-24 months that resemble the subject in size, location, and segment. For each, note sale price, number of sites, reported occupancy and financials (NOI if available). Calculate the cap rate: if NOI is known, simply NOI/Price. If not, infer NOI by applying an expense ratio to the reported gross income (many marketing flyers list a cap rate or NOI figure – use that if provided). Ensure the comps are truly comparable: for example, if appraising a Class A resort in Florida, a sale of a small rural campground in Kansas is not comparable. Stick to same-state or similar tourism region when possible. If the comp set shows, say, cap rates between 8.5% and 10%, that's a good starting benchmark.
2. Adjust Comps for Differences: For each comp, adjust the cap rate to reflect differences from the subject. Key differences: location quality, asset quality, age, remaining upside. For instance, if a comp sold at 9% cap but it was an older park with lower amenities than the subject new project, one might argue the subject justifies a slightly lower cap (perhaps 8.5–8.75%) due to its superior quality and presumably stronger forward NOI growth. Conversely, if a comp was a portfolio sale (usually portfolios trade at a premium/lower cap because of scale), and the subject is single-asset, you might adjust the cap upward. Create a grid: list comps, their cap rates, and note if subject is better (+) or worse (–) on various factors, and qualitatively adjust. This yields a narrowed cap rate range for the subject. For example, maybe comps centered around 9.5%, but after adjustments you conclude the subject should be around 9%. Document these judgments for transparency.
3. Consult Industry Surveys/Guides: Cross-check your range with industry cap rate surveys or guides. As noted, CBRE's H2 2023 survey found overall CRE cap rates rose to ~7% average (but that includes apartments, etc.). Niche data like the CBRE Canada presentation pegged campground caps at 9–13%, and RV Park University says 8–12% in 2025. These sources reinforce that your derived cap is plausible. If your number is way outside common ranges, reconsider why – is the subject truly unique or is there an optimism bias? Investor sentiment reports (Emerging Trends by ULI/PwC, etc.) can provide context – e.g. if investors broadly require higher yields now than a year ago, your cap should reflect that trend. Also consult any available investor surveys specific to outdoor hospitality: some boutique firms publish annual investor questionnaires indicating required yields for RV parks or glamping projects. If one such survey says "most investors seek 10-12% unlevered IRRs on campground deals", that implies a cap in that vicinity given stabilized cash flows. Use such data to validate that your cap rate meets typical return hurdles.

4. Factor in Development Stage (if applicable):

If the subject is a new development being valued for loan or feasibility, consider adding a bit of risk premium since it's not yet stabilized. Often, appraisers might use a higher discount rate during construction and then apply a stabilized exit cap. In simpler terms, you might value the project at stabilization with a cap of X%, but then ensure the "as-is" value or land value today reflects deductions for construction risk, lease-up, etc. This can be done via a DCF (discounted cash flow) analysis if needed, but if sticking to a cap rate method, perhaps pick an exit cap and then subtract entrepreneurial profit. For the purpose of feasibility, we typically present the stabilized value with the chosen cap rate (to show the end game) and confirm that the development cost is, say, 20% less than that to allow for profit. This gives lenders comfort there's a value cushion.

5. Use the Risk-Free + Spread Framework as a Gut Check:

As a final check, use the formula Cap = (Risk-Free + Total Risk Premium – Growth) with your assumed inputs. For example, plug in 10-year Treasury 4.0%, assumed risk premium 5.0% (for a solid asset), growth 2.0%. That yields 7.0%. If your selected cap was 9.0%, ask why the difference? Perhaps the risk premium should be higher (maybe 7% for a smaller asset, which would give 4+7-2 = 9%). This exercise helps articulate the components of your cap rate. In lender discussions, you can say: "We assumed a 9% cap which equates to a 5% real risk premium over the 10-year, net of modest growth – a reasonable spread given the asset's risk profile". This sounds rigorous and can be backed by the economic rationale given earlier.

6. Prepare Sensitivity and Justify Resiliency

It's wise to show a sensitivity analysis around the cap rate. For example, illustrate project NPV or IRR if cap rates end up 0.5% higher or lower than expected. This demonstrates to the lender or investor how much buffer exists. If a 1% rise in exit cap still yields acceptable returns or coverage, that's a strong position. If the project only works at the chosen cap and falls apart with a slight change, that indicates high risk. Having this analysis ready shows you've not just picked a rosy number but have considered downside.

By following these steps, the selected cap rate will be well-grounded in market reality and analytical reasoning. For instance, suppose we conclude a 9.0% stabilized cap rate for a new RV park in Texas Hill Country. We would support it by saying: "Recent comparable sales in Texas resorts ranged 8.5–9.5%. Given our park's superior amenities but slight distance from town, we choose mid-point ~9%. This is in line with industry guidance that RV parks trade ~8–12%. It also offers a 500 bps spread over the 10-year Treasury, which is appropriate compensation for risk, and leaves room for ~200 bps NOI growth expectation. At 9%, the project's DSCR is healthy and if cap rates moved to 10%, the project would still break even on equity – indicating resilience." Such an explanation would be compelling to stakeholders.

In summary, a practical methodology combines data (comps, surveys) with analytical models (risk factor build-up, band-of-investment) and stress-testing to arrive at a cap rate that is both defensible and tailored to the specific project and market conditions.

2026 Scenario Outlook: Base, Upside, Downside

Looking ahead to 2026, we construct three scenarios – Base Case, Upside, and Downside – to explore how varying economic and market conditions could impact RV park values and performance in our top states. This forward-looking view helps investors and lenders gauge the range of outcomes and prepare strategies (whether it be hold vs. sell decisions, refinancing plans, or risk mitigation) for each scenario:

Base Case (Most Likely)

In our base case, the economy in 2025–2026 is stable with moderate growth, and interest rates begin to gradually ease from their peaks but remain above pre-2020 lows. We assume the Fed has tamed inflation to ~2–3%, allowing perhaps a slight reduction in policy rates by 2026. The 10-year Treasury in this scenario might drift down to ~3.5% by mid-2026 (from ~4% in early 2025). This easing, combined with sustained investor appetite for yield, could compress cap rates slightly in late 2025 into 2026. We assume cap rates in our top states tick down ~25–50 bps from 2024 levels under base conditions – e.g. an average park that was a 9.3% cap in 2024 might be ~9.0% by 2026 if financing costs abate a bit.

On the NOI side, base case anticipates steady demand. The outdoor travel trend persists – Americans continue to favor camping and RV trips at elevated levels compared to pre-pandemic, aided by flexible work and ongoing interest in nature. We don't foresee another surge, but rather modest growth: perhaps a 2–3% annual increase in camping nights nationally, and our top states likely meet or slightly exceed that (thanks to demographic tailwinds like retiring boomers). This translates to NOI growth in line with inflation (~2% annually), with some markets higher (Florida perhaps 3-4% with its population growth) and some flat (if new supply opens in a pocket, it could temper growth until absorbed). Occupancies in base case hold stable or improve marginally – e.g. if a park was at 70% annual occupancy in 2024 after the post-COVID normalization, it might stay around 70–72% going forward. Essentially, base case is a "soft landing": no major recession, but no boom – just a healthy status quo.

Value Implications (Base)

With slightly lower cap rates and slightly higher NOI, property values would trend upward modestly. For instance, take a park earning $500k NOI in 2024 at a 10% cap (value $5.0M). By 2026 in base case, NOI might be $550k (approx 5% cumulative growth over two years), and cap might be 9.5%. Value = 550k/0.095 ≈ $5.79M. That's about a +16% increase in value over two years – a decent appreciation, largely from improved cap rate. If cap only compresses 25 bps to 9.75%, value would be $5.64M (+12.8%). This suggests low double-digit % value growth in base case for quality assets. Development projects completed in 2025 would benefit from this environment by stabilizing into a favorable (albeit not explosive) market – they could hit pro forma NOI and perhaps see a bit better exit cap than initially underwritten, boosting returns. From a lender perspective, base case means loans made in 2024–25 are slightly better covered by 2026 (NOI up, values up, DSCR improved), reducing risk. We'd likely see refinancing volume pick up in late 2025 as rates dip, with some sponsors locking in longer-term debt at around 6% or lower by 2026. Construction lending might also open up a tad more if interest rates fall – some projects on hold could restart, though supply will still take time to materialize. The base case essentially supports the notion that top state RV parks remain a solid asset class, with performance normalizing to a gentle growth trajectory and values inching upwards in real terms.

Upside Case:

In the upside scenario, several positive factors align. The economy could accelerate due to, say, technological productivity gains or a mild resurgence in consumer spending without inflation – allowing the Fed to significantly cut rates. Perhaps by 2026 the 10-year Treasury falls back to ~2.5–3.0%, reminiscent of mid-2010s levels. This could happen if inflation dramatically undershoots or a mild early-2025 recession prompts aggressive easing (though that initially would be downside, the quick policy response could turn it into upside by 2026). In this scenario, investor sentiment improves markedly: real estate capital flows resume strongly, and specialty sectors like outdoor hospitality gain more institutional acceptance (maybe a big success story like KOA's continued expansion or Sun Communities reporting stellar earnings brings more investors to the space). Cap rates in the upside case compress noticeably – perhaps 100+ bps tighter than 2024 levels for top-tier parks. If RV park caps averaged ~9–10% in 2024, they might move to ~8% by 2026 in this scenario, especially for high-end assets.

On the demand side, upside could see a combination of travel boom and demographic kicker. For instance, if fuel prices stay reasonable and economic growth is strong, Americans may take more and longer road trips. An emerging trend could be younger millennials and Gen Z embracing RV life even more, building on the pandemic bump (we already saw younger camper growth per KOA reports). Also, international tourism might rebound – foreign visitors renting RVs to tour the U.S. could add demand (this was subdued during COVID, could rebound by 2026). Occupancies in prime destinations could hit new highs (surpassing 2021's records); parks might be able to push daily rates well above inflation. In numbers, upside might entail NOI growth of 5%+ annually for a couple years in the best markets. Imagine Florida or Arizona parks raising rates 8-10% in one year because demand surges (not unprecedented in a boom year) and then normal 3-5% thereafter. Even more conservative areas might see 3% instead of 0-2%. Additionally, if upside includes further consolidation (big operators buying out mom-and-pops), they often bring efficiencies and dynamic pricing that increase NOI post-acquisition – effectively raising the bar on values.

Value Implications (Upside)

The combination of NOI growth and cap rate compression yields a substantial value increase. Using the earlier example: a $500k NOI at 10% cap ($5.0M) in 2024. Upside 2026: maybe NOI is $600k (+20% from new pricing power) and cap is 8%. Value = 600k/0.08 = $7.5M. That's a 50% increase in value. Even less dramatic: say NOI +15%, cap 8.5% (150 bps compression) gives 575k/0.085 = $6.76M, a ~35% jump. These upside gains are significant and would yield outsized IRRs to equity holders (likely mid-20s% IRRs if it happened in a 2-year span). For developments, upside case is golden: projects would not only achieve NOI faster/higher, but possibly exit or refi at much better cap rates, creating big profits. Many developers might opt to refinance and hold in this scenario, given the improved cash flow and value (the long-hold strategy becomes very rewarding here). Lenders in upside might see refinancing as an opportunity to deploy more capital at slightly lower rates but on much higher property valuations (meaning their LTVs drop automatically – existing loans become very secure). The key in upside is not to get carried away – one should still manage expenses and service quality because overconfidence can lead to oversupply. But realistically, oversupply takes time; even if everyone decides to build, it would be 2027-28 before new parks open en masse, so in the near term upside really just benefits incumbents. Summed up, upside is a scenario of cap rate compression and NOI expansion leading to strong value appreciation – a scenario in which those who invested in the top states would outperform most other real estate sectors (since few traditional asset classes could see cap rates move that much).

Downside Case

In the downside scenario, we consider a potential economic downturn or other adverse events. For instance, a recession in 2025 (perhaps triggered by geopolitical issues or financial market corrections) could hit consumer spending and travel. Unemployment might rise, leading some households to cut back on vacations. RV travel demand could soften, reversing some of the pandemic gains. In fact, there were hints of this in 2023–24: some brokers observed occupancies down 3–5% year-over-year in 2024 as some pandemic-era campers returned to other travel modes. Downside could see a further drop in transient occupancy, say another 5% or more in 2025, especially in parks that saw many first-timers (who might not return if economic times are tight). Additionally, fuel prices or inflation could pinch RVers – if gas prices spike or discretionary income falls, RV trips are one of the things that get postponed. We also must consider interest rates in downside: ironically, a recession might cause rates to fall (which would help cap rates), but if the downturn is coupled with financial strain, credit spreads could widen – meaning even if Treasurys drop, lenders might charge more margin or reduce lending, keeping effective borrowing costs high for riskier assets. In a stagflation-type downside (high inflation, low growth), rates could even rise further – but that seems less likely given current Fed stance. We'll assume in downside that interest rates eventually come down as the Fed tries to stimulate, but sentiment and risk aversion keep cap rates elevated or even higher due to higher risk premia. Investors may demand more yield during uncertain times, offsetting any benefit of lower base rates. So, in numbers: downside might have cap rates rising by 50–100 bps from 2024 levels for RV parks. If 2024 was ~9.3% avg, maybe 2026 downside sees 10–10.5% as buyers retreat and only low offers come in.

NOI in downside likely declines or stagnates. Perhaps transient-heavy parks see a 10–15% revenue drop in a recession (this happened in prior recessions for some campgrounds, though the asset class proved fairly resilient in 2008 vs hotels – people still camp, but they might trade down to cheaper accommodations or shorten trips). Long-term or monthly site rentals might hold steadier (in fact, some people economically distressed might live in RVs, occupying parks – as noted, high housing costs have driven some to RV living, which could ironically keep certain parks full even in recession). So, the impact will vary: destination vacation parks likely feel it more (fewer tourists), while extended-stay parks near cities might even see stable demand from budget-conscious folks or traveling nurses, etc. For our analysis, let's assume NOI growth is negative for a year or two: maybe a -5% in 2025 and flat in 2026, before recovering. So a park with $500k NOI might go to $475k then back to $480k. Not a collapse, but a dip.

Value Implications (Downside):

Combining higher cap rates and lower NOI is a double hit to value. Using our example: $500k NOI at 10% cap was $5.0M. If NOI drops to $480k and cap rises to 11%, value = 480k/0.11 = $4.36M. That's ~ -13% from the original value (and -27% from the upside case we had!). In more extreme downside, if NOI fell 10% and cap hit 12%, value would drop ~25–30%. So likely a 10–20% value decline in a moderate recession scenario for many RV parks.

Importantly, this would vary: a high-end resort might have more cushion to lower rates to maintain occupancy (sacrificing NOI a bit but staying cash-flow positive), whereas a marginal park might see occupancy plummet and value hit harder. One thing to note: because many RV parks still generate good cash even in downturns (people may choose camping as a cheaper alternative to hotels – 2020 showed how outdoor hospitality can benefit when other travel falters), the downside might not be as severe as for, say, luxury hotels. But lenders will still be cautious. Some owners who overpaid in 2021 at low cap rates might be underwater in this scenario – we could see distressed sales or note sales if they can't cover debt. Indeed, the RVBusiness article mentioned some pandemic-era buyers were trying to sell in 2024 as returns underwhelmed; in a deeper downturn that trend would intensify.

For developers, downside means difficulty. New projects might struggle to hit occupancy targets, and if values (exit cap) are lower, the IRR could vanish. Many planned developments would be shelved entirely – which ironically might help existing parks by preventing oversupply. Lenders in downside become highly conservative: they might cut LTVs, require interest reserves, or halt lending to the sector for a while. Any project without a strong balance sheet sponsor might not get funded. Those developers mid-construction could face appraisal reductions and need to inject more equity (or use expensive mezz) if values fall. It's a scenario of playing defense: focus on operations (keeping your park attractive to win limited demand), possibly offer promotions to retain customers, and manage expenses tightly to preserve NOI. If interest rates drop in this scenario due to Fed cuts, there may be a window to refinance to reduce debt service, which could save some owners. But if credit spreads remain high (banks unwilling to lend freely), not everyone will get to refinance easily.

Long-Hold View in Downside: For those who can weather it, the downside is likely a temporary valley. The secular trends (more campers, retiring boomers, remote work enabling travel) should resume once the economy recovers. So, the long-term investor might treat a downturn as a chance to buy assets at a discount or invest in improvements to gain market share, coming out stronger on the other side. In our top states, the core demand drivers (warm weather, attractions, etc.) aren't going away – Disney World will still be there, Smoky Mountains will still be beautiful. So occupancy will bounce back. The question is surviving any cash flow crunch in the interim (hence maintaining solid DSCR and not over-leveraging is vital so you don't default in the dip).

To summarize the scenarios in a concise table:

Base Case 2026: Steady economy, slight interest rate relief. Cap rates ~0.25–0.5% lower than 2024, NOI growing ~2%/yr. Value Impact: modest appreciation (~10–15% over 2 years). Projects meet pro forma; lenders see improving coverage.

Upside Case 2026: Strong economy, rate cuts, investor enthusiasm. Cap rates 1%+ lower, NOI surging in top markets (5%+ growth). Value Impact: significant appreciation (30–50% in 2 years for prime assets). High returns, refi opportunities abundant.

Downside Case 2026: Recession or travel downturn, rates possibly lower but risk spreads high. Cap rates +0.5–1% higher, NOI flat or down up to 10%. Value Impact: decline in values (10–20% down). Some distress possible, new dev slowed. Focus on cash flow management.

By presenting these scenarios, a consultant can show a lender that the analysis has baked in uncertainties. Often, lenders will underwrite the base or slightly downside scenario (to be safe). For example, they might value collateral at a cap slightly higher than market (like our base/downside) and require the project still works. If it also still works in the true downside, that's ideal. If not, at least they see where the break-even is. For an investor, seeing upside potential helps gauge if the risk is worth it.

Crucially, even in the downside scenario, the top 5 states we identified are likely to fare better than others. Why? Because they have diversified demand streams and are primary destinations. A marginal state with one attraction might see sharper drops. Our states have buffers – Florida has in-state visitors even if out-of-state travel dips, Texas has some recession-resistant demand (workers, etc.), the Carolinas and Tennessee might benefit from people choosing regional car trips instead of expensive flights (indeed in last recession, local/regional tourism often held up better than long-haul). So the top states are somewhat resilient, which is another reason they are top picks.

Conclusion

In conclusion, the scenario analysis reinforces a core finding: destination-type RV parks in strong markets are a durable asset class, capable of producing solid returns in base conditions, outsized gains in boom times, and manageable performance in downturns (with proper capitalization). Lenders can take comfort that, in a diversified portfolio, these assets have shown less downside volatility than many hotel assets and can bounce back strongly post-recession. Meanwhile, investors should remain prudent (not over-leverage, lock in fixed rates where possible) but can be optimistic about the long-run value trajectory in these top states given the secular trends in travel and retirement. Each scenario provides lessons – base case: stay the course, focus on incremental improvements; upside: take advantage of low rates to refinance or expand; downside: control costs, maybe acquire weaker competitors – and being prepared for all three ensures a robust strategy moving forward.

For lenders and investors evaluating projects in this sector, UnionMetric provides independent RV park feasibility study services that meet SBA and USDA requirements.

Sources

• MMCG's RV Park Outlook 2025–2030 (on supply/demand and geographic hotspots)
• North Star's 2025 Investment Outlook (on new supply and amenity trends)
• Kampgrounds of America's annual reports (on camping demographics)