Seeking Alpha

Rentals in securitizations rent for less

  • An interesting study from Kroll finds single-family rental properties whose rent payments were bundled into securitizations in Blackstone's initial deal rent for just 94% of market rate. Blackstone's issuance was followed by one by American Homes 4 Rent (AWH -0.3%) as well as another from Blackstone.
  • “It may be a function of the size of the properties or the age of the properties,” says Kroll's Michelle Patterson. Or perhaps the issuer was in such a hurry to get the homes filled and the debt deal done that properties were rented for less than they otherwise would have been. A person familiar with Invitation Homes (Blackstone) says rental rates are expected to converge with market rates over time.
  • The first securitization received strong demand from investors, but they asked for beerier yields the next time around.
  • Other players: ARPI, SBY, SWAY
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