Huge Landlord Mergers Are Producing Growing Profits
Large-scale investors are all the rage in the single-family home sector. With big players merging left and right, singe-family rentals are trending towards the multifamily model—massive real estate companies.
American Residential Properties and American Homes 4 Rent merged last week, creating a 47,000 home company. This follows the $8B, 30,000 home merger of Starwood Waypoint Residential Trust and Colony American Homes in September, CNBC reports.
American Residential Properties co-founder Laurie Hawkes says these giants will provide high-quality rentals that slash demand for homeownership, which is already at its lowest level in 50 years.
"The stock market expects us to accomplish in three years what it took the multifamily sector 25 years to do," Hawkes says.
As it turns out, managing thousands of houses is more difficult than a couple of apartment buildings, though, so the business model is still being perfected to fit the single-family market.
Hawkes says idealizing the fledgling management structures will mean savings and better margins. [CNBC]