Will Wall Street Buy Into Single-Family Rental Craze?

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Commercial Real Estate in MissoulaSo Far, Institutional Ownership of Single-Family Rentals Appears to Have Legs, Analysts Say

By Randyl Drummer March 6, 2013
Private-equity funds, pension funds and other institutional investors have been playing in the single-family rental investment market since the middle of last year, but the space is likely to get quite a bit more crowded in coming months as public REITs join the party.Along with dozens of other private firms and pension funds, two of the biggest private equity investors in the world, Blackstone Group LP and Colony Capital LLC, formed private REITs and stepped up their acquisitions of vacant homes to be converted to rentals last year, initially targeting the large pool of distressed housing in Arizona, Georgia, Nevada, Texas and Florida, where prices have fallen furthest and been slower to appreciate.Among the other major players was pension investor Alaska Permanent Fund Corp., which provided $600 million in investment capital to Malibu, CA-based American Homes 4 Rent to purchase and manage foreclosed homes.

As of last week, American Homes 4 Rent — led by Wayne Hughes, who founded Public Storage (NYSE: PSA), one of the largest self-storage REITs in the U.S. — announced it will go public, using net proceeds from its planned IPO to acquire and renovate single-family homes.

Lambros Real Estate Commercial
Lambros Real Estate ERA Commercial Department