Second Avenue Secures $250M Capital Commitment for SFR Investments
The funds provided by Monroe Capital will join more than $650 million from other recent investors.
Second Avenue Group has secured $250 million in capital that will go towards building out its single-family rental presence across the U.S. Monroe Capital provided the debt and equity capital to Second Avenue, bringing the company’s current capacity for new investments to approximately $1.7 billion. The company also recently received $500 million from investment manager Waterton, $150 million from BLG Capital, and significant amounts from other institutional capital partners.
Second Avenue was founded in 2017 and provides a vertically-integrated platform for single-family rentals. The company is currently active in 10 markets including Atlanta; Charlotte, N.C.; Pittsburgh, Penn.; Kansas City, Mo.; Dallas and San Antonio, Texas; and Tampa, Orlando, Jacksonville, and Fort Myers, Fla. Mike Rothman, founder & CEO of Second Avenue told Multi-Housing News, that the company is planning to expand into 10 additional markets including Phoenix; Denver; Las Vegas; Salt Lake City; Birmingham, Ala.; Nashville, Tenn.; Raleigh and Winstom-Salem, N.C; and Charleston and Greenville/Columbia, S.C.; Rothman told MHN.
Rothman also told MHN that Second Avenue looks at both acquisitions and new developments for on- and off-market SFR transactions. The company is expecting to deploy up to approximately $1 billion annually and has already deployed $100 million in the first quarter of 2022, Rothman told MHN.
“For new construction, we build high quality, affordable, and energy efficient homes in areas where there is an undersupply of housing,” Rothman told MHN. “For existing homes, we buy and renovate to create value and deliver clean, safe and functional rental homes.”
CENTRALIZED PLATFORM FOR SFR
Rothman said in prepared remarks that the demand for SFR assets has grown, but the processes for organizations to invest in this sector has become complex and fragmented. Instead, Second Avenue uses its tech-enabled platform to manage all aspects of SFR investment in a much more streamlined way.
But Second Avenue isn’t the only company going after SFR assets across the U.S. In January, Heitman and Sylvan Road Capital formed a partnership that would build a $640 million portfolio of SFR properties across the U.S. The booming sector is also attracting many investors and lenders who want to ride the momentum of growth seen with SFRs.