Debt consolidation Continues in SFR Sector as Nest Starwood Agrees to Purchase GI Partners' ' 3,106 Rental Houses for $815 Million

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Portfolio Deal Represents 13% Growth in Possession Size for Colony Starwood, Which Currently Handles the Characteristics

Nest Starwood Homes( NYSE: SFR) consented to acquire a portfolio of 3,106 single-family rental houses from Waypoint/GI Venture LLC for $815 million.

Colony Starwood currently manages the portfolio for the sellers, which is located in southern and northern California, Chicago, Atlanta, Tampa, Phoenix, Miami and Orlando.

As of March 31, 2017, the GI portfolio was 95.8% occupied with an average monthly lease per unit of $1,703, which the company stated was, “meaningfully greater than the average of the other public single-family rental REITs.”

Waypoint/GI got the single-family rental homes at approximately $262,395 per home.

Fred Tuomi, CEO of Colony Starwood Residences, said the deal represents another important action in industry debt consolidation amongst the greatest players, with Nest Starwood wanting to increase scale and recognize incremental operational effectiveness throughout its SFR platform.

” The GI portfolio acquisition provides an appealing opportunity for the business to efficiently convert a large portfolio of homes from handled to entirely owned possessions, all within our present market footprint with concentration in the high development California market,” included Tuomi.

Nest Starwood Houses prepares to fund the acquisition by offering shares of its typical stock.

GI Partners was one of the earliest financiers to move into the single-family rental area through its 2011 financial investment in Waypoint Property Group (WREG). WREG combined its property management operation with an affiliate of Starwood Capital Group to manage its portfolio of SFR assets, which were later on combined with Nest American Homes in 2016 to create Colony Starwood Houses.

” As an early institutional investor in the SFR industry, we are pleased in playing a function in turning a cottage market into a permanent property class within the $30 trillion U.S. real estate market,” said Hoon Cho, handling director at GI Partners.

Paul Hastings served as special legal advisor to GI during the deal.

The single-family rental market remains highly fragmented with only 1% of the around 15.8 million single-family rentals in the United States owned by institutional owners, according to John Burns Real Estate Consulting.

American Homes 4 Rent (NYSE: AMH )stays the top dog in the industry with more than 48,300 rental homes in its portfolio. Blackstone’s Invitation Houses (NYSE: INVH), which completed a public offering earlier this year, can be found in a close second with more than 47,900 houses. Following the GI portfolio acquisition, Nest Starwood Houses will own more than 34,400 SFR rental properties.GI Portfolio Details Market– # Houses– Occupancy– Average Month-to-month Rent Southern California– 1,043– 96.30%–$ 1,794 Northern California– 825– 97.30 %–$ 1,921 Chicago– 395– 93.50%– $1,648
Atlanta– 312– 94.40%– $1,406
Tampa– 221– 94.50%– $1,383
Phoenix– 157– 97.40%
— $1,400 Miami– 143– 96.10 %– $1,735 Orlando– 10– 90.00 %– $1,539.

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