Hope everyone is enjoying Sunday football, the NY teams are a DISASTER. Anyway...
We wanted to highlight an interesting transaction that came across the wire in the single-family rental space. Pretium, one of the most active and longest-tenured private investors in the single-family rental subsector, formed a JV with Crescent Communities to invest in build-to-rent homes across the Sunbelt. The JV contemplates investing ~$1 billion to develop more than ~3,000 homes (~$300-$350k average cost to build) in contained single-family rental communities. Homes in the first community will be available for rent early next year.
This is just another example of (1) significant amounts of capital being put to work in the space, which helps to (2) drive up home values/replacement cost, and (3) further validates AMH's long-term strategy of warehousing lots and land on the balance sheet for development and future delivery into the operating portfolio. AMH's lead in this race is significant, with meaningful positive implications for Tail duration earnings power and potential opportunities for third-party management down the line. Data from CoreLogic, John Burns Real Estate Consulting, Trepp and the National Renal Home Council all indicate more than adequate demand/rental rate growth to warrant new development activity set against persistent shortages in the for-sale housing market.
CHART OF THE DAY: Phoenix Apartment Rents Trending +26.5% vs. 2019 Levels
Source: Apartmentlist.com
Link to Hedgeye Apartment Rent Tracker
Please call or e-mail with any questions.
Rob Simone, CFA
Managing Director
Twitter: @HedgeyeREITs
Cell:
