Lafayette and Guardian Form Single-Family Build-to-Rent Investment Company
The New York-based company, Lafayette Communities, is launching its first single-family development, 51 detached homes, in Tampa, FL in June.
NEW YORK CITY—Lafayette Real Estate, a New York-based private equity firm focused on single-family homes, has teamed up with one of its upstarts, real estate investment firm Guardian Residential, forming a new investment company, Lafayette Communities.
The new firm is entirely dedicated to acquiring and developing newly constructed homes to market as long-term rentals. Thibault Adrien, currently CEO of Lafayette Real Estate, and Dennis Cisterna III, currently CEO of Guardian Residential, are heading Lafayette Communities. Both have long-term careers in the single-family rental sector and had been working on putting together the partnership over the last year.
“Dennis and the Guardian team bring exceptional origination and pre-underwriting skills while the Lafayette platform will provide strong final underwriting and property management capabilities,” says Adrien. “I think we can build a very scalable investment company dedicated to the build-for-rent space.”
Lafayette Communities is opening its first rental community, the Preserve at Pine Grove, in the Riverview submarket of Tampa, FL in early June. The development has 51-units of modern, affordably priced three and four bedroom detached homes.
The firm is developing additional communities in FL and plans to expand into TX, GA, NC and TN before the end of 2019. They plan to deploy between $150 million and $200 million in the next 12 to 18 months.
Cisterna describes the company as the next evolution for single-family investments. “We are able to scale our business much faster, while operating our portfolio more efficiently than traditional operators in the sector,” he says.
The company points out distressed inventory has been a primary source of single-family rental operators. With the opportunities shrinking, operators are looking for ways to expand their holdings. Lafayette Communities is looking toward workforce housing.
“It’s unfortunate we aren’t building enough homes in this country post-recession to fulfill the demand in the market,” says Adrien. “Even worse is the sharp decline in the development of entry-level housing. Even though we are developing these communities as rentals in the short term, we feel adding affordable supply to markets is very beneficial to satiate long-term demand for workforce housing.”
Adrien founded Lafayette Real Estate in 2011, focusing funds on single-family home distressed assets in foreclosure. In 2014, the company launched Brandywine Homes USA as its property management arm. In 2016, Lafayette Lending began investing in renovations for flipping property. It manages three funds on behalf of investors investing across 2,000 single-family homes, 200 fix and flip loans and 150 vacant land lots.