A joint venture of Denver-based Atlas Real Estate and DivcoWest, a San Fransisco-based investment firm, has joined the Single Family Rental (SFR) exodus with a $1 billion purse targeted at the sector.
The JV plans to invest $250 million of equity in single-family homes as rentals throughout the Western United States and expects to deploy $1 billion acquiring and renovating homes in high-growth states, including Colorado, Arizona, Idaho, Nevada and Utah, where Atlas currently manages more than 4,200 units.
“DivcoWest’s partnership with Atlas is a testament to our decade plus history as an acquisition partner and the long-standing relationships we have cultivated with institutional investors since our inception,” said Ryan Boykin, co-founder of Atlas Real Estate.
“The start of this new joint venture also points to the strength of the SFR housing sector and to the full-service real estate investment platform Atlas has created.”
Tony Julianelle, CEO of Atals, said the JV “will function to increase the inventory of single-family rentals in Atlas-managed markets, presenting a tangible opportunity to serve people and create a positive resident experience while helping meet the supply demands by providing high quality housing.”
The transaction demonstrates investors’ increasing demand for SFR assets, a sector which has grown from individual units owned and rented out by small investors, to large investors acquiring significant portfolios, building new units specifically for rent and creating entire communities of SFR properties.
In recent months Nuveen Real Estate, one of the world’s largest real estate investment managers, announced that it will invest up to $400 million through Sparrow, a newly launched single-family home rental platform.
Billions are also being poured into the sector by Invitation Homes in a joint venture with Rockpoint, Canada’s Tricon Investment Group and homebuilder, Lennar Corporation, which has partnered with investment giants Allianz Real Estate and Centerbridge to invest $4 billion.