NEW YORK CITY—In one of the single-family rental sector's largest portfolio deals to date, Amherst Holdings LLC said Friday that it had completed the sale of a portfolio of 4,262 SFR properties to Altisource Residential LP for $652 million. The buyer is an operating partnership controlled by Altisource Residential Corp., a publicly traded REIT listed on the New York Stock Exchange as RESI.
The seller-financed deal more than doubles the size of RESI's SFR portfolio and puts it on target to achieve its goal of 10,000 rental properties by the end of this year. It enhances the REIT's presence in new and existing strategic target markets, including Florida, Texas, Georgia, Tennessee, North Carolina and South Carolina.
“This sale is a marquee transaction for our single-family rental business and demonstrates key aspects of our unique business model,” says Sean Dobson, CEO at Amherst Holdings. “We are creating turnkey opportunities for investors globally to gain access to large portfolios of professionally managed and financed rental homes.”
Drew Flahive, president of Amherst Single Family Residential, elaborates. “We have built an integrated platform with the ability to acquire, develop and convert individual single family properties to rental use and then orchestrate the sale of large portfolios of these homes to institutional investors,” he says. “We will continue to expand our acquisition and property management activities to meet the growing demand from both consumers and investors for high quality rental properties.”
At RESI, CEO George Ellison says his company “continues to successfully execute its strategy to transition the Company into a 100% single-family rental REIT and to capitalize on attractive single-family rental economics. These high-yielding properties are an excellent fit for the Residential brand and expand our geographic reach in strategic markets.”
The seller financing for this transaction represented 75% of the purchase price and was provided in accordance with a loan agreement that has a term of up to five years and a floating interest rate of one-month Libor plus a fixed spread. Amherst will remain the property manager for the portfolio through its subsidiary, Main Street Renewal LLC, an internally managed, vertically integrated property acquisition, repair and management business.
RESI affiliate Altisource Portfolio Solutions S.A. remains RESI's property manager for all of the REO and SFR assets not managed by MainStreet Renewal. To help facilitate the deal, Altisource waived the exclusivity provisions in the existing master services agreement between the two companies. The agreement has been amended to allow for a $60-million liquidation fee in the event RESI decides to liquidate 50% or more of its SFR portfolio managed by Altisource.
In a statement issued on Friday, Altisource says, “We are very supportive of RESI's portfolio acquisition as it accelerates RESI's transition to a 100% single family rental company. We believe this acquisition strengthens RESI's position in the industry and positions them well for growth, which are positive for Altisource. We believe the terms we agreed to with RESI further underscore RESI's long-term commitment to the rental home business and our strong ongoing relationship with RESI.”
More than 300 of the industry's leading national investors, REITs, banks, private equity firms, asset management firms and other institutions will join us as we explore the market conditions behind the trends at this year's RealShare National Investment & Finance, scheduled for Oct. 5 and 6 at the Roosevelt Hotel in New York City. Learn more.
The seller-financed deal more than doubles the size of RESI's SFR portfolio and puts it on target to achieve its goal of 10,000 rental properties by the end of this year. It enhances the REIT's presence in new and existing strategic target markets, including Florida, Texas, Georgia, Tennessee, North Carolina and South Carolina.
“This sale is a marquee transaction for our single-family rental business and demonstrates key aspects of our unique business model,” says Sean Dobson, CEO at Amherst Holdings. “We are creating turnkey opportunities for investors globally to gain access to large portfolios of professionally managed and financed rental homes.”
Drew Flahive, president of Amherst Single Family Residential, elaborates. “We have built an integrated platform with the ability to acquire, develop and convert individual single family properties to rental use and then orchestrate the sale of large portfolios of these homes to institutional investors,” he says. “We will continue to expand our acquisition and property management activities to meet the growing demand from both consumers and investors for high quality rental properties.”
At RESI, CEO George Ellison says his company “continues to successfully execute its strategy to transition the Company into a 100% single-family rental REIT and to capitalize on attractive single-family rental economics. These high-yielding properties are an excellent fit for the Residential brand and expand our geographic reach in strategic markets.”
The seller financing for this transaction represented 75% of the purchase price and was provided in accordance with a loan agreement that has a term of up to five years and a floating interest rate of one-month Libor plus a fixed spread. Amherst will remain the property manager for the portfolio through its subsidiary, Main Street Renewal LLC, an internally managed, vertically integrated property acquisition, repair and management business.
RESI affiliate Altisource Portfolio Solutions S.A. remains RESI's property manager for all of the REO and SFR assets not managed by MainStreet Renewal. To help facilitate the deal, Altisource waived the exclusivity provisions in the existing master services agreement between the two companies. The agreement has been amended to allow for a $60-million liquidation fee in the event RESI decides to liquidate 50% or more of its SFR portfolio managed by Altisource.
In a statement issued on Friday, Altisource says, “We are very supportive of RESI's portfolio acquisition as it accelerates RESI's transition to a 100% single family rental company. We believe this acquisition strengthens RESI's position in the industry and positions them well for growth, which are positive for Altisource. We believe the terms we agreed to with RESI further underscore RESI's long-term commitment to the rental home business and our strong ongoing relationship with RESI.”
More than 300 of the industry's leading national investors, REITs, banks, private equity firms, asset management firms and other institutions will join us as we explore the market conditions behind the trends at this year's RealShare National Investment & Finance, scheduled for Oct. 5 and 6 at the Roosevelt Hotel in
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.