The protracted nationwide upheaval in residential real estate has resulted in a new category of investors channeling billions of dollars into the single family rental market.
According to a report by CoStar, which tracks commercial real estate trends, as much as $8 billion may already be dispersed into purchases of single family rentals.
One of the biggest players in the emerging category is the Blackstone Group, through its Invitation Homes which got off the ground in November.
The activity is feeding on the availability of foreclosed homes and the lack of new single family construction, which has resulted in a supply that by some estimates is barely one-third of the historical average.
Among the significant 2012 investments reported by CoStar were Blackstone/Invitation Homes, 6,500 homes in Arizona and Southern California; Waypoint, 2,400 in Arizona and California; KKR, 200 in Arizona and Nevada and Colony Financial, 3,600 in California, Arizone, Nevada, Texas, Georgia and Colorado.
One twist in the new intitatives is a fund started by US Residential Asset Fund to invest more than $20 million in foreclosed homes which will in turn be marketed as rent-to-own properties.
An Australian investment group, US Masters Residential Property Fund, has acquired more than $165 million in residential inventory around New York City, with plans to improve the properties for resale rather than rental.
US Masters believes that the strategy will capitalize on a number of trends including historically low mortgage rates and average mortgage payments; a 30-year low of new housing starts and rising rental rates as property values have gone in the opposite direction.
