CPP Investments, Greystar Form SFR Venture

The partnership plans to invest north of $800 million in equity.

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The Canada Pension Plan Investment Board and Greystar Real Estate Partners have formed a joint venture aiming to develop and acquire purpose-built single-family rental communities in the U.S. The partners have allocated approximately $840 million in equity. CPP Investments will own a 95 percent stake, while Greystar will own the remaining 5 percent.

The joint venture plans to develop and acquire professionally managed rental communities comprising detached or semi-detached homes and townhomes, with private garages and backyards. Greystar, will manage and operate the portfolio on behalf of the joint venture.

READ ALSO: Why Institutional Investors Should Eye SFR Allocations

The partnership will target burgeoning areas near employment hubs, transit and retail centers across the Sun Belt, Mountain West and West Coast regions.

SFR: the new residential darling

Purpose-built, accessible rental single-home communities are offering new options to renters in search for more space in a professionally managed home, said Bob Faith, founder, chairman & CEO of Greystar, in prepared remarks. He added that the joint venture intends to expand the rental experience by providing the option of single-family homes while preserving the experience and sense of community of multifamily properties.

This is not the first time CPP Investments and Greystar partner up, the companies having announced multifamily developments in target markets earlier this year. In July 2021, the companies announced the launch of a $1.2 billion life science venture focused on the U.S., which will provide lab and office space.

Earlier this year, another Canadian pension giant, PSP Investments, entered the SFR market, forming a joint venture with Pretium. Moreover, during the past year, many large investors have entered the space or increased their allocations in the niche, announcing billions in commitments. The list includes Blackstone, Invesco, Atlas Real Estate and Tricon Residential.

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