Pretium Closes 2nd Single-Family Rental Fund At $1B
Its first fund for this asset class also exceeded $1 billion when it closed in 2013.
NEW YORK CITY–More investment capital for single-family rental housing assets will be flowing into the market, with Pretium Partners’ closing of its second fund focused on this asset class. The alternative asset management firm announced it has closed Pretium Residential Real Estate Fund II with total equity capital committed during the fundraising period exceeding $1 billion. This also included targeted commitments from separately managed accounts pursuing SFR strategies.
The firm’s first fund, Pretium Residential Real Estate Fund I, closed in 2013 raising $1.18 billion in equity commitments. For its second fund, investors came from across the globe, the company said, and included insurance companies, pension funds, and high-net worth individuals.
Pretium says it is the largest private owner of single-family rental homes in the US, with more than 26,000 homes owned and under management across 15 markets.
SFR Fund II’s strategy is to focus on single-family homes in major US markets that are experiencing above-average employment and population growth. SFR Fund II will use Pretium’s self-managed real estate platform, Progress Residential, to acquire, renovate and manage the homes. Thus far, more than 5,000 homes have already been purchased by Progress for SFR Fund II.
Private-sector companies like Pretium, along with the public-sector REITs in this space, continue to acquire single-family homes even as housing prices continue to rise and even though the favorable market dynamics that existed during the foreclosure crisis — favorable for these companies that is — are no longer in place.
These companies have identified an ongoing need, or at least desire, on the part of middle-income families to rent homes instead of apartments and instead of buying. “A growing demographic of financially stable young adults, coupled with high barriers for homeownership and limited supply of entry-level housing, has created significant demand for quality single-family rental homes,” Dana Hamilton, Head of Real Estate at Pretium said in a prepared statement.
Indeed, even fundamentals are so bright that new entrants are targeting the space. Late last month Bloomberg, citing anonymous sources, reported that the Teacher Retirement System of Texas, Singapore’s GIC Pte and Toronto-based Tricon Capital Group formed a $2 billion joint venture to acquire as many as 12,000 rental homes.