MORE Residential and Stockbridge Capital Group have become the latest investors in the growing single-family rental market, announcing they have formed a $4 billion joint venture to acquire SFR communities in high-growth U.S. markets.
The joint venture between MORE Residential, an owner and operator of residential rental properties, and Stockbridge, an investment firm, has the potential to scale further over time. MORE Residential, led by former senior executives of Monogram Residential Trust, a multifamily REIT taken private in 2017, will oversee day-to-day operations. Stockbridge, a real estate investment manager with approximately $25 billion of assets under management, will contribute to overall investment strategy execution.
Terry Fancher, Stockbridge executive managing director, said in prepared remarks the MORE Residential leadership team has the deep rental housing management experience and extensive network of developer relationships to help the JV source new acquisitions.
The firms said they are targeting newly-built SFR properties in purpose-built, build-to-rent communities, including those that have been recently constructed, are under development or in the planning stages. The JV will seek to acquire BTR communities with 50 or more homes with modern finishes and high-quality amenities such as clubhouses, fitness centers and pools in locations with strong population and job growth.
The JV has already acquired or is in the process of purchasing more than $1 billion of BTR communities that are in various stages of development and completion throughout the Sun Belt. Properties already in the portfolio include three townhouse-style developments: Greene Creek, 85 units in Boiling Springs, S.C.; Bella Citta, 236 units in Davenport, Fla.; and Addison Place, 127 units in Spartanburg, S.C.
Mark Alfieri, MORE Residential CEO, said in a prepared statement the SFR and BTR housing model caters to the preferences of the U.S.’s two largest demographic cohorts—Millennials and Baby Boomers. Millennials are seeking larger living spaces to accommodate growing families while Baby Boomers are looking for the hassle-free lifestyle of renting combined with modern amenities and professional management, all at an accessible price relative to home ownership.
Hot SFR Market
The joint venture comes within days of Mill Creek Residential announced it is launching a nationwide brand of SFR communities. The firm plans to start building Amavi properties this year, with the first groundbreaking taking place in Charlotte, N.C., in the first quarter of 2022.
Last week, the Canada Pension Plan Investment Board and Greystar Real Estate Partners formed a joint venture with about $840 million in equity to develop and acquire BTR communities in the U.S. CPP Investments will own a 95 percent stake and Greystar will own the remaining 5 percent.
Earlier this year, another Canadian pension giant, PSP Investments, entered the SFR market when it formed a joint venture with Pretium. Other largest investors have also entered the market or expanded their commitments, including Blackstone, Invesco, Atlas Real Estate and Tricon Residential.