Rockpoint, Resicap Launch $250M SFR Venture

Photo by Ann Wallace via Unsplash

Private equity firm Rockpoint Group and single-family rental owner and operator Resicap have entered into a $250 million joint venture to acquire single-family rental homes, the firms announced. The new partnership plans to acquire, renovate and lease between 4,500 and 5,000 single-family rental homes in markets across the Southeast, including in Florida and Texas.

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The new venture will expand Rockpoint’s footprint in the booming sector and include more varied price points and markets, according to the firm. The agreement between the two companies comes less than two weeks after Rockpoint announced a $375 million joint venture with Invitation Homes, the nation’s largest single-family rental owner, to deploy more than $1 billion into acquiring and renovating properties across the Southeast.

Atlanta-based Resicap is involved in the purchase, renovation, development and management of single-family rental homes across 34 states and 59 markets.

Rockpoint Managing Member Tom Gilbane said in prepared remarks that his firm believes the single-family rental sector will become a “core asset class” going forward for many institutional investors.

A hot sector

Single-family rental homes account for more than one-third of the country’s 47 million rental units, according to a 2017 report by the Joint Center of Housing Studies of Harvard University. The segment had been gradually attracting institutional investors in recent years, before picking up significantly during the pandemic.

Last year, developer Global City Development and alternative investment firm Leste teamed up on a $2.5 billion housing platform with plans to build 10,000 single-family rental homes across the U.S.

After the onset of the COVID-19 outbreak in the U.S. in March, many of the largest single-family rental home owners have raised billions to expand their portfolio of homes. This May, American Homes 4 Rent teamed up with JPMorgan Chase’s asset management arm J.P. Morgan Asset Management to establish a joint venture seeking to build around 2,500 single-family rental homes in markets across the West and Southeast.

Earlier this month, global asset management firm Nuveen announced its entry into the market with a $400 million investment in a new single-family rental startup called Sparrow. The startup will receive capital to expand its platform while growing its portfolio of single-family rental homes, starting with targeted cities in Arizona, Florida and Texas.