Colony American Homes is one of the largest owners of single family home rentals in the country. Having raised over $2.2 billion privately they are reallocating these homes into a Real Estate Investment Trust, REIT, with Colony Capital, headed by Thomas Barrack.
Their portfolio was recorded to have over 9500 single family homes in 8 states as of last month. Their constantly growing portfolio was acquired in a number of different methods; Auctions, short sales, and bulk purchases from banks, at an estimated cost of $1.1 billion. The price of each unit averages out to $159,000 and currently generating an average of $1,270 a month in rent. Currently, the portfolio holds an overall occupancy of 55%.
At the IPO filing the company stated that, "We believe current market conditions present a unique opportunity to consolidate the ownership of single-family homes in the United States at distressed prices, rent them to tenants, manage and position the assets for revenue growth, stability and capital appreciation, and thereby achieve attractive rates of return."
Colony Homes plans to raise an additional $100 million and have their eye on other markets with solid demand for single family home rental to continue their growth.
"In addition to the MSA’s, in which we already own homes, we are constantly analyzing new markets to enter; we have identified Jacksonville, FL; and Charlotte, NC, as potential expansion markets, as we believe conditions in these MSAs support attractive investment returns."
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