Atlanta’s booming business for single-family rental homes just got a big new player. – posted in Atlanta Business Chronicle!
Altisource Residential Corp. (NYSE: RESI), a Virgin Islands-based company that owns and manages single-family rental properties throughout the United States, is entering the Atlanta market. Altisource reported Aug. 10 it has agreed to buy 1,325 single-family homes, all in the metro Atlanta area, from Invitation Homes for $112.6 million. The deal is expected to close in August.
The deal is Altisource’s first-ever bulk single-family residential purchase. The company has previously acquired rental properties primarily by buying sub-performing and non-performing loan portfolios. As of the end of 2014, the company’s portfolio held nearly 11,000 sub-performing and non-performing residential mortgage loans.
Altisource said the metro Atlanta homes it’s buying have an average market value of $85,000, are an average of 1,575 square feet, have an average monthly rent of $848, and are about 94 percent occupied.
The company joins a number of other big players in the Atlanta single-family rental home business. These include American Homes 4 Rent (NYSE: AMH), which owned 2,500 homes in metro Atlanta as of June 30. American Homes 4 Rent owns a total of more than 37,000 properties in cities including Dallas, Indianapolis, Atlanta, Charlotte, Chicago, Houston, Cincinnati, Tampa, Jacksonville and Nashville.
Another big player is Starwood Waypoint Residential Trust (NYSE: SWAY), which owned 2,557 single-family rental homes in metro Atlanta as of June 30.
Speaking to stock analysts about the Atlanta deal, Altisource CEO George G. Ellison said the company is expanding its acquisition strategies to grow its rental portfolio.
Altisource will continue to bid on pools of non-performing mortgage loans, but won’t bid at prices which render the economics unattractive, he said. “We believe at this point in the market cycle, currently rented homes can achieve our shareholder return goals better than purchased NPLs, but now we have the proven flexibility to acquire either in response to market opportunities,” he said.
“Our goal,” Ellison went on to tell analysts, “is to build a large single-family rental portfolio and maintain a consistent, sustainable dividend. NPL [non-performing loan] prices have been driven to what we feel are uneconomic levels. As I said earlier, we will continue to bid on NPL pools and acquire them where it makes sense, but we will now also pursue alternative channels to acquire single family rental homes.” This may include further bulk acquisitions similar to the homes it’s buying from Invitation Homes, or acquiring single-family rentals on a one-by-one strategy, he said.
August 17, 2015 – Atlanta Business Chronicle…