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Tricon Residential announces $5 billion joint venture for single-family rentals

PUBLISHED ON 2021-07-20 01:12:00 EST Yashasvini


Tricon Residential has entered into a joint venture with three institutional investors to acquire single-family rental homes in the U.S. Sun Belt. The joint venture worth $5 billion will allow the rental housing company to buy more than 18,000 rental houses over the next three years. 

Tricon will partner with one of its existing global investors, along with the Teacher Retirement System of Texas and Pacific Life Insurance Company to deploy capital in the hot U.S. housing market. The collaboration will commit $1.4 billion in initial equity, which can be ramped up to $1.55 billion, including Tricon's co-investment of $450 million, representing approximately $5 billion of purchasing power when including associated leverage.

The funds and debt will be used to buy properties worth approximately $250,000 and invest in the U.S. markets where Tricon already operates, though it may also expand into a small number of new markets. Tricon will serve as the asset manager and property manager of the Joint Venture.

In a company statement, Gary Berman, President, and CEO of Tricon Residential said, "Tricon has now raised $2 billion of third-party equity commitments year-to-date and has the capital in place to grow our single-family rental portfolio to nearly 50,000 homes over the next three years. We anticipate growing our portfolio by over 6,000 homes in the coming year, and are already well on track with more than 1,500 homes acquired in Q2."

Bloomberg reported that the joint venture represents one of the largest efforts to raise money for single-family rentals. The business is getting increasingly competitive as institutional investors are moving to an asset class once dominated by small investors, in the middle of a housing boom sparked by the COVID-19 pandemic, pushing prices out of reach for many would-be homebuyers.

The housing rental company announced a separate joint venture in May that would buy $1.5 billion worth of purpose-built rental houses. It raised $300 million in preferred equity from investors led by Blackstone Group, last year.

Picture Credits: Afire

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