North American residential asset manager Tricon Capital Group has entered into a $2bn (€1.7bn) joint venture with two institutional investors to buy single-family rental homes.
The $5.5bn manager said it has partnered with an unnamed sovereign wealth fund and a US state pension scheme to invest $250m each for a one-third interest in the venture.
The joint venture intends to use the total committed capital of $750m to acquire 10,000-12,000 single-family rental homes expected to be valued at $2bn when including associated leverage. The capital is expected to be deployed over a three-year investment period.
The assets will be acquired and managed by Tricon’s American Homes platform (TAH).
Gary Berman, the president and CEO of Tricon Capital, said: “The entry of two of the largest and most respected global real estate investors into single-family rental is not only a transformational milestone for Tricon but also a significant endorsement for this burgeoning asset class.”
The joint venture also provides Tricon with a clear path to scale, enabling its TAH platform to grow to 25,000-30,000 homes over the next three years, Berman said.
”Our objective since entering the single-family rental industry has been to build up our balance sheet and prove out new businesses in order to ultimately become a bigger and better asset manager; we have taken a major step towards achieving this goal by entering into this JV, and in doing so, we believe the earnings potential and financial flexibility that stem from being an asset manager will come back into focus.”
