Partners Group acquires a USD 1 billion portfolio of single-family homes in the US
Denver, US; 16 May 2022
- Portfolio comprised of more than 3,500 homes, including over 1,000 under construction
- Homes spread across 17 states in the Sunbelt, one of the fastest growing areas of the US
- The construction of new homes is helping to expand the supply of rental properties
Partners Group, a leading global private markets firm, has on behalf of its clients acquired a portfolio of single-family rental homes in the US with a combined GAV of USD 1 billion ("the Portfolio"), from affiliates of Fortress Investment Group and Kairos Living.
The Portfolio consists of 2,528 recently constructed single-family rental homes and a pipeline of over 1,000 homes under construction spread across 17 states in the Sunbelt region, with the majority located in Texas, Alabama, Georgia, and Oklahoma. This region is one of the fastest growing areas of the US due to its high job growth rates, relative affordability, and favorable climates. Migration to the Sunbelt accelerated during the pandemic as new remote working patterns led to increased demand for rental properties with more space than conventional apartments. The pipeline of new homes under construction will help expand the base of rental properties in the region. Freddie Mac estimated that the US housing gap reached four million homes in 2020 due to household formation consistently outpacing new home construction since the Great Financial Crisis. Supply chain issues and labor shortages during the pandemic may have further widened this gap.
Partners Group will work with Kairos Living to execute on the pipeline of homes under construction. Kairos Living will handle the management of the Portfolio, including identifying prospective residents. As part of its value creation plan, Partners Group will also provide growth capital to acquire additional homes and invest in the Kairos Living operating platform as the venture scales.
Ron Lamontagne, Managing Director, Head Private Real Estate Americas, Partners Group, says: "Millennials are raising families at a time when the high costs of living and a chronic undersupply of housing are making purchasing a home difficult for many. The provision of affordable rental properties for families that are not ready to buy their first home has therefore never been more important. We were attracted by this investment as it sits within one of our high-conviction themes, residential-for-rent, and helps ease housing supply constraints."
Scott Egarian, Member of Management, Private Real Estate Americas, Partners Group, adds: "A rising number of companies are locating or relocating to the Sunbelt from more expensive and high cost, high tax metro areas. As a result, the target demographic for the Portfolio, which typically includes young families with stable incomes that are looking for more space, is growing. Our vision is to capitalize on the fragmented nature of the single-family rental market to build a platform across the region whilst ensuring superior tenant experiences."
Partners Group's Private Real Estate business has USD 18 billion in assets under management and has acquired 280 real estate developments and properties globally to-date.