Tricon announces USD5bn JV to acquire owe 18,000 single-family rental homes

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Tricon Residential, an owner and operator of single-family rental homes and multi-family rental apartments in the United States and Canada, has entered into a joint venture arrangement (SFR JV-2) with three institutional investors to acquire single-family rental homes targeting the middle-market demographic in the US Sun Belt. 

The JV will serve as the successor to Tricon's existing single-family rental Joint Venture (SFR JV-1), which has acquired over 9,000 homes and is now fully invested. The investors participating in this investment vehicle include the Teacher Retirement System of Texas, Pacific Life Insurance Company and one of Tricon's existing global investors.

The Joint Venture will have an initial equity commitment of USD1.40 billion and include the ability for investors to increase the vehicle size to USD1.55 billion, including Tricon's co-investment of USD450 million, representing approximately USD5 billion of purchasing power when including associated leverage. Over a three-year investment period, SFR JV-2 is expected to acquire more than 18,000 single-family rental homes primarily from resale channels complementing Tricon's other investment vehicles targeting new single-family rental homes. Tricon will serve as the asset manager and property manager of the Joint Venture.

"We are very excited to partner with three leading investors to launch SFR JV-2, which represents the largest joint venture in Tricon's history and is a significant milestone for institutional investment in the single-family rental asset class," says Gary Berman, President and CEO of Tricon Residential. "Tricon has now raised USD2 billion of third-party equity commitments year-to-date and has the capital in place to grow our single-family rental portfolio to nearly 50,000 homes over the next three years. We anticipate growing our portfolio by over 6,000 homes in the coming year, and are already well on track with more than 1,500 homes acquired in Q2."

According to the National Rental Home Council, owner-occupied housing in the United States has increased by more than 10 per cent in the last five years, while rental housing has only increased by 1 per cent. In 2020 alone, the rental housing market lost over 275,000 units. Tricon is addressing this gap by providing affordable rental housing within America's fastest-growing markets.

"With the closing of this Joint Venture, Tricon is well positioned to accommodate the incredible demand we are seeing across the US Sun Belt for high-quality single-family rental homes at an accessible rental price point. We will also be able to enhance the scale and efficiency of our technology-enabled operating platform, allowing us to continue to innovate and deliver superior service to our residents," says Gary Berman.

"We are excited to expand our partnership with Tricon after a very successful investment program in our first Joint Venture", says Eric Lang, Senior Managing Director of Private Markets, Teacher Retirement System of Texas.  

"We also value Tricon's approach to operations and customer service, which we expect will drive investment returns for the teachers of Texas," adds Grant Walker, Senior Director of Real Estate, Teacher Retirement System of Texas.