JP Morgan Asset Management is considering a second US single-family rental (SFR) homes joint venture, according to Mike Kelly the asset manager’s Americas real estate head.
In February last year, JP Morgan invested $625m (€531.8m) on behalf of its flagship open-ended core US real estate vehicle Strategic Property Fund to form a single-family homes investment joint venture with American Homes 4 Rent.
Kelly told IPE Real Assets that JP Morgan is looking at ”the possibility of teaming up with a second operating partner” for investing capital in the single-family rental investment strategy.
“We believe that this property type does have strong long-term growth prospects.”
Most of the capital that is being invested in the single-family rental sector in the US has been in the Southeast region, due mainly to the population growth in that region of the country.
“I think in the future you will see some capital placed into assets in parts of the west.” This could include places like Utah, Seattle and Phoenix, said Kelly.
Many institutional investors have looked at single-family rental as one that is very similar to apartments from an income perspective.
“We think that currently there are higher returns for SFR than apartments, but that could change in the future with so much institutional capital coming into the space that could lead to lower returns,” said Kelly.
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