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The single-family rental (SFR) asset class is attracting attention from investors who want to do more than just own rental portfolios. OwnAmerica, a firm engaged in the marketing and sales of SFR properties, launched its next generation private trading platform on January 1.
The North Carolina-based firm has that has traded more than $420 million in SFR assets in the last three years and closed more than $27 million in the beta phase of the new platform, but kept a low profile while doing it.
“The largest and most professional owners of single family rentals do not want their properties ‘on the market.’ They don’t want their competitors or their tenants to know they have plans to exit,” said Greg Rand, CEO of OwnAmerica. “It’s an interesting paradox; make a market for a product, but don’t broadcast it widely.”
SFR is an asset class that has been around forever but has only gained recognition in the last few years. No fewer than 17 institutional investors have acquired and managed more than 170,000 rental homes since 2012, and the market has been further validated by $13 billion in securitizations, five real estate investment trust (REIT) initial price offerings, and many mortgage companies that have targeted both small and mid-sized SFR investors.
With the SFR boom in the last three years, the SFR market now includes approximately 15 million homes that house about 12 percent of the U.S. population. Given the unprecedented growth in the SFR market recently, an effort is underway to turn the SFR asset class form a fragmented cottage industry into a streamlined, technology-enhanced market. Some benchmarks in the SFR industry that occurred in 2015 were Altisource’s acquisition of RentRange and Investability, the funding and launch of Roofstock, and HomeUnion’s proof of concept.
The focus for OwnAmerica has been on Stabilized Portfolios, which are packages of SFR properties with management and tenants in place. The average transaction conducted by OwnAmerica average transaction contains 48 SFR units and is valued at approximately $6 million.
OwnAmerica has begun a focus on activating new sources of capital into the SFR space, with the launch of its new private trading platform.
“The early adopters in SFR investment have paved the way for the next phase; core asset investors who prioritize capital preservation, a reasonable yield, and safety,” Rand said. “Single family homes are a great story. Everyone understands the value in owning shelter over families.”
