JLL Creates New Team to Target Single-Family Rentals
The move is in direct response to institutional interest in the asset class.
With 16 million housing units in the US and a growing institutional presence, the single-family rental housing segment is a growing force in real estate.
To capitalize on this asset class, JLL has created a new team, led by Bill Miller, who co-leads JLL’s National Multi-Housing Group, and includes Matthew Putterman, Chris Shea and Zach Nolan.
JLL says its additional focus on the SFR space is a direct response to increasing the institutional interest in the sector. As people have sought more space during the pandemic, the popularity of single homes has spiked. JLL Research reports that home sales in September increased 10% above August for a seasonally adjusted 6.5 million homes sold.
Single-family rentals have also thrived during COVID. Rents in institutionally owned SFR portfolios have grown more than 3% annualized in 2020, according to DBRS Morningstar.
While SFRs are a growing asset class, institutions with more than 100 homes still own less than 3% of total stock. That provides new entrants with a lot of runway for growth, according to JLL.
Since the pandemic has begun, a number of large transactions have occurred as institutions looked to scale up. JLL points to a recent $133.7 million capitalization that it closed on behalf of Haven Realty Capital with an institutional equity source for a six-property portfolio of new and to-be-built homes in the greater Atlanta area.
In November, RangeWater Real Estate announced plans to deploy $800 million in Sunbelt markets to build 15 build-to-rent single-family communities over 18 months. The single-family rental communities will be called Storia.
In October, Invitation Homes and Rockpoint Group formed a $375 million joint venture that will acquire single-family homes to operate as rental residences. The JV will deploy a total of over $1 billion, including debt, to acquire and renovate single-family homes in markets within the Western US, Southeast US, Florida and Texas, where Invitation Homes already owns homes.
Over the summer, a syndicate of investors led by Blackstone Real Estate Income Trust made a $300 million preferred equity investment in Toronto-based Tricon Residential, with BREIT acquiring $240 million of the preferred equity.