Heitman Forms $640M SFR Partnership

The portfolio will consist of more than 3,000 homes.

Photo by Jarek Ceborski on Unsplash

Heitman and Sylvan Road Capital are teaming up to build up a portfolio of single-family rental properties across the U.S. Heitman formed the joint venture on behalf of an affiliate of the firm.

The joint venture is looking to acquire more than 3,000 single-family homes in several U.S. markets to create a diversified portfolio with a total gross capitalization of $640 million. Heitman and Sylvan Road are planning to target value-add assets for the portfolio, looking to get stable returns from the communities over the long-term.

Tom McCarthy, senior managing director of Heitman’s North American Private Real Estate Equity Group, said in prepared remarks that Sylvan Road’s partnership with the firm will offer an end-to-end platform including acquisition, renovation, lease-up, management and disposition capabilities.

A SERIES OF SFR PARTNERSHIPS

For the joint venture, Heitman will be leaning on its experience throughout several residential sectors, including traditional multifamily, senior and student housing. The firm has amassed a portfolio of approximately $47 billion in assets under management since being founded in 1966. In that portfolio, Heitman is also working with The Spectrum Cos. and Batson-Cook Development Co. to construct a 325-unit community in Charlotte, N.C.

As for SFRs, Heitman made its first investment in the sector in 2018. McCarthy also said in prepared remarks that the firm was early to enter the SFR sector and will continue to look for more opportunities in the growing space.

Many other companies have caught onto the momentum in the single-family sector as well. In December, MORE Residential and Stockbridge Capital Group formed a partnership to acquire SFRs in high-growth markets in the U.S. Months prior, Tricon Residential partnered with three institutional investors to acquire more than 18,000 SFR homes in the U.S.’ Sun Belt region. JLL also joined in on the trend, acquiring a large stake of a SFR portfolio with more than 4,000 homes that are owned and managed by Amherst Residential.

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