American Homes 4 Rent, which specializes in owning and developing single-family houses to rent, has formed a partnership to develop more build-to-rent SFR.

Värde Partners has joined with American Homes 4 Rent to form a land banking facility with an initial $500M to acquire and develop land. The partners closed their first six land transactions, which represent acquisition and development costs of over $150M. The companies didn't specify the locations of the properties.

"The demand for high-quality single-family rental homes has never been higher despite a persistent shortfall in supply, creating opportunities to invest in segments that we believe are well-positioned for growth," Värde Partners Senior Managing Director Brendan Bosman said in a statement.

California-based American Homes 4 Rent owns nearly 58,000 single-family rental properties in 22 states. Minneapolis-based Värde Partners is an alternative investment firm with over $13B in assets under management.

Though build-to-rent industry players have caught flak for spiking rents in recent months, that hasn't kept investors from the space.

In January, Chicago-based residential real estate developer Core Spaces and investor Harrison Street formed a JV to invest as much as $1.5B in build-to-rent houses. Its pipeline includes over 6,500 units in Texas, Tennessee and Florida.

Investors are attracted to build-to-rent because it is expected to provide a return of about 8% on average, according to The Wall Street Journal, citing Green Street data, as for-sale home prices rise and lock many potential buyers out of the market. Those returns are the highest of the 18 property sectors Green Street monitors.