Tricon Residential has teamed up with Teacher Retirement System of Texas, Pacific Life Insurance Company and one of Tricon’s existing global investors to invest $5bn (€4.23bn) in US single-family rental homes.

The residential property investor has created the SFR JV-2 joint venture with the trio to acquire single-family rental homes targeting the middle-market demographic in Sun Belt states in the US. 

The newly created joint venture will have an initial equity commitment of $1.40bn and include the ability for investors to increase the vehicle size to $1.55bn, including Tricon’s co-investment of $450m, representing approximately $5bn of purchasing power when including associated leverage.

Tricon said it will serve as the asset manager and property manager of the joint venture.

Over a three-year investment period, SFR JV-2 is expected to acquire more than 18,000 single-family rental homes, Tricon said.

Tricon said the new venture will serve as the successor to SFR JV-1, Tricon’s existing single-family rental joint venture, which has acquired over 9,000 homes and is now fully invested.

Gary Berman, president and CEO of Tricon Residential, said Tricon has now raised $2bn 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 the second quarter.”

Eric Lang, senior managing director of private markets at Teacher Retirement System of Texas, said: “We are excited to expand our partnership with Tricon after a very successful investment program in our first joint venture.”

Grant Walker, senior director of real estate at Teacher Retirement System of Texas, said: “We also value Tricon’s approach to operations and customer service, which we expect will drive investment returns for the teachers of Texas.”

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