Single-Family Investment Rush

Colony Capital CEO Thomas Barrack says his company is pursuing a new frontier in real estate investment: single-family housing as large-scale rental assets. The goal of buying and renting large numbers of houses isn’t to flip them, he explains, but for cash flow. A lot of people are locked out of buying a house but can still afford to rent one, as they would an apartment. Moreover, even younger Americans who can afford to buy a house are skeptical. Thomas keynoted the University of Chicago Booth School of Business’ sixth annual Real Estate Conference this week.
We found Ned Davis Research Group’s Meghan Wolfe and Alejandra Grindalat the conference. Alejandra was on the Future of Urban Centers and Infrastructure panel; among the many factors that affect real estate growth, she says demographics is one of the more predictable. Shifts in global population are going to have major impacts on real estate and infrastructure, especially as urban areas grow even more, she says. One arresting fact: by 2050, over 70% of the world’s population is going to live in cities, up from just over half today. (And 20% of all horses in one-horse towns will trot over to cities, leading to a new phrase: "one Palomino block.")

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