Pretium, Ares Management and Front Yard Residential complete single-family rental take-private transaction
Pretium and a group of its investors, and funds managed by the Real Estate Equity and Alternative Credit strategies of Ares Management Corporation (Ares) have completion their acquisition of Front Yard Residential Corporation (Front Yard), a leading provider of high-quality and affordable single-family rental (SFR) housing.
The completion of the transaction makes Pretium the second-largest owner and operator of SFR properties in the United States with a portfolio of over 55,000 cash-flowing single-family rentals. Pretium will manage the venture and partner with Ares to further optimise and expand Front Yard’s attractive and well-diversified portfolio of SFR assets.
Don Mullen, Chairman and CEO at Pretium, says: “There is significant opportunity in the SFR market and a clear sense of urgency among institutional investors to deploy capital to this asset class given record-high occupancy rates, stable cash-flow characteristics, and potential for continued capital appreciation. With the Front Yard transaction now complete, we are exceptionally well positioned to further capitalise on a diverse set of SFR investment opportunities. We look forward to leveraging our unique operating platform and scale to further drive operating margins and deliver attractive returns to investors.”
“We are pleased to have completed this transaction with Pretium and Front Yard and look forward to putting our collective experience and industry expertise to work to create a scaled and highly diversified portfolio of SFR homes to benefit our stakeholders,” says David Roth, Partner and Head of US Real Estate Equity in the Ares Real Estate Group.
“We look forward to creating value with our partners in what we believe is a particularly strong asset class with compelling secular market tailwinds,” says Joel Holsinger, Partner and Co-Head of Alternative Credit in the Ares Credit Group.
“Pretium and Ares are the perfect partners to lead Front Yard in the next phase of our company’s growth and take our business to the next level as a private, resident-first SFR operator,” says George Ellison, Chief Executive Officer of Front Yard Residential. “Their extensive operating and investment experience coupled with the depth and breadth of their real estate platforms should create unique opportunities for Front Yard to meaningfully scale our business, creating attractive and affordable housing options for a diverse resident base.”