ARPI Is A New Residential REIT That Is Growing Fast
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PR Newswire (Mar 12, 2014)
at MarketWatch.com (Mar 3, 2014)
at CNBC.com (Feb 12, 2014)
PR Newswire (Jan 21, 2014)
PR Newswire (Jan 2, 2014)
PR Newswire (Dec 19, 2013)
ARPI vs. ETF Alternatives
Monday, Apr 1412:27 PM
Monday, Apr 1412:27 PM| Comment!
- At the peak last summer, Blackstone's (BX) Invitation Homes unit was buying about $125M of homes per week, but - with good deals harder to find - has slowed the pace to $30M-$40M, and global real estate chief Jonathan Gray suggests it could drop further. “It’s not going to get larger," he says. "There’s less and less distressed housing ... We have slowed down [buying] significantly in a number of markets as a result of prices going up."
- Gray expects real estate will do just fine without Blackstone's giant-sized purchases. "We are an increasingly smaller and smaller part of the story now that the recovery has plenty of momentum on its own."
- The pure-play single-family rental stocks' performance continues to disappoint, with the two public the longest - Silver Bay (SBY +0.3%), and American Residential Properties (ARPI -0.9%) - both near their lows since issuance. Others: American Homes 4 Rent (AMH -0.6%), Starwood Waypoint (SWAY -1.8%).
Wednesday, Mar 269:43 AM|Wednesday, Mar 269:43 AM| 1 Comment
Thursday, Mar 2012:23 PM
Thursday, Mar 2012:23 PM| Comment!
- Colony American Homes is selling $513.6M worth of paper backed by rental payment on 3,399 single-family properties in 20 metro areas in 7 states. It would be the 2nd such deal following Blackstone's landmark offering late last year (American Residential Properties has hired Deutsche to put together what would be deal #3).
- A $299M tranche of the deal has received a AAA rating from Moody's, Kroll, and Morningstar. S&P has said these rental-backed bonds don't yet meet the criteria necessary for a top rating.
- Colony American Homes is a unit of Colony Financial (CLNY +0.1%) and it tried, but failed to go public last year.
- Watching the action are: SBY, ARPI, AMH, SWAY.
Thursday, Mar 2012:09 PM
Thursday, Mar 2012:09 PM| Comment!
- Underperforming in the single-family housing sector today is American Residential Properties (ARPI -2%) after a cut to Underperform at BAML.
- Like others in the business, the company is looking for reasonably priced sources of fresh capital and - amid its Q4 results last week - disclosed it's tapped Deutsche Bank to lead a $300M securitization deal for its rental income. Deutsche, of course, led the first such securitization - one from Blackstone late last year.
- CC transcript
Wednesday, Mar 125:12 PM|Wednesday, Mar 125:12 PM| Comment!
Wednesday, Mar 124:34 PM
Wednesday, Mar 124:34 PM| Comment!
- 633 homes purchased for $104M during quarter, 15% more than Q3, and bringing number of homes higher by 12%. Leased properties up 11% to 458; occupancy rate of 75% on total portfolio unchanged from Q3, 86% on properties owned six months or longer, down from 92% in Q3.
- Increased renewal rents by 3.4%. Broke even on core FFO.
- Funded $18M in short-term private loans; owned $42M of these now, with average interest rate of 11.8%.
- Economies of scale? Purchases in Q4 are all over: 291 in Texas, 103 in Tennessee, 88 in North Carolina, 59 in Illinois, 31 in Georgia, 23 in Indiana, and on down the line until 2 each in South Carolina and Nevada.
- In the first two months of 2014, company has purchased another 308 homes for about $46M and put under contract another 340 homes for about $53M.
- CC tomorrow at 11 ET.
- Press release
- ARPI no trades AH
Thursday, Mar 63:47 PM
Thursday, Mar 63:47 PM| Comment!
- After giving a AAA rating to a portion of the first bonds backed by home rental payments to come to market late last year, Moody's is requesting comments on its proposed methodology. Moody's decision on the first deal was based on the liquidation value of the homes under a "heavily-stressed scenario."
- Competitor S&P, as well as Fitch say the paper doesn't yet meet the criteria for them to assign top ratings. In Moody's request for comment, it says when grading the deals it's focused on two sources of cash flow: Rental income and proceeds from the sale of the underlying properties.
- American Homes 4 Rent (AMH +0.3%) is prepping a rental bond of its own, and others in the sector like Silver Bay Realty (SBY +1.4%), American Residential Properties (ARPI -1.9%), and Starwood Waypoint (SWAY +1.2%) no doubt have their own plans. Last year's pioneer Blackstone (BX +0.1%) is surely eyeing up a 2nd offering as well.
Thursday, Feb 203:54 PM
Thursday, Feb 203:54 PM| 4 Comments
- American Homes 4 Rent (AMH -1.4%) last night announced the resignation of CFO Peter Nelson "to pursue other career interests." The company hopes to follow Blackstone's (BX +1.4%) first-ever rental securitization with one of its own and reportedly last month hired Goldman to lead the deal.
- Speaking of Blackstone's rental securitization, rents collected on the collateral for that paper fell 7.6% from October to January, according to Morningstar. "Payments declined as expiring leases and early tenant departures left residences backing the bonds ... vacant," according to the report.
- Tied at least tangentially to single-family rentals are parts of Bill Erbey's empire, and it's struggling today following earnings reports from Altisource Asset Management (AAMC -7.2%) and Altisource Residential (RESI -5.8%). Others in the family: Altisource Portfolio Solutions (ASPS -5.9%), Ocwen (OCN -1.3%), and Home Loan Servicing Solutions (HLSS -1.4%). A summary of how they fit together is here.
- Other single-family REITs: Silver Bay (SBY -0.9%), American Residential (ARPI), and Starwood Waypoint (SWAY -1.5%).
Tuesday, Feb 410:32 AM
Tuesday, Feb 410:32 AM| 2 Comments
- When Blackstone (BX +1%) in November launched the first-ever securitization of single-family rental payments, the top tranche of the $479M deal priced at just 115 bps over Libor and was 5x oversubscribed, but that aggressive pricing could come back to haunt.
- After trading in the secondary market at above face value for the last three months, one dealer recently offered the riskiest slice at below par.
- Institutional types have spent about $20B for 150K homes since the crisis and are now looking to monetize or at least get a return on that investment. “Now that there’s been a ground swell of purchasing properties, are we now not seeing the major funds trying to offload," one securitization conference attendee recently asked Deutsche's Ryan Stark - one of those who put together the Blackstone deal.
- Blackstone's been going gangbusters of late as single-family housing is but a small slice of its business, but the performance of pure-play rental shops - SBY, AMH, ARPI - leaves something to be desired. A new entrant - Starwood's SWAY - began trading yesterday.
Thursday, Jan 94:19 PM
Thursday, Jan 94:19 PM| Comment!
- The company has been in investor meetings this week making the case for its single-family rental business, say sources, setting the stage for its first securitization of rental payments.
- No details are available yet, but it's expected American Homes 4 Rent (AMH) will pitch the new paper at an ABS conference in Vegas later this month.
- As of the end of Q3, AMH had a $3.5B portfolio of 21K foreclosed homes purchased for the purpose of renting them out. As comparison, Blackstone - which successfully launched a $479M bond late last year - has over 40K homes. These securitizations will provide another cheap source of capital for the single-family players, allowing them to be even more aggressive in their purchases of homes.
- Others: SBY, ARPI
Friday, Dec 202013, 12:59 PM
Friday, Dec 202013, 12:59 PM| 4 Comments
- "It's gone from being good to being disturbing," says former Fannie Mae economist Thomas Lawler, of Wall Street's rush into the single-family landlord business as described by Bloomberg's Heather Perlberg and John Gittelsohn in a great read.
- Blackstone (BX +0.1%) is clearly at the vanguard of the move, but it's joined by American Homes 4 Rent (AMH +0.5%), American Residential Properties (ARPI +0.1%), Silver Bay Realty Trust (SBY +0.2%), and a unit Colony Financial (CLNY +0.8%).
- With easy and cheap access to capital, the Wall Street firms have become the gorillas in the single-family market, outbidding first-time homebuyers and maybe driving up prices towards another property bubble. And capital may be about to get even cheaper and easier thanks to Blackstone's recent raising of $479M through the securitization of rental payments on homes it owns. American Homes 4 Rent and Colony have their own securitizations in the works.
Thursday, Dec 192013, 4:11 PM
Thursday, Dec 192013, 4:11 PM| Comment!
- American Residential Properties (ARPI) boosts its available financing by $40M to $380M, adding JPMorgan as a lender in its credit facility. The accordion feature allows future expansion all the way up to $500M.
- "We are very pleased that another major bank has recognized the attractive economics of the single-family rental market and committed to providing additional capital that we can utilize to further grow our portfolio and create long-term value for our shareholders," says COO Laurie A. Hawkes.
- Press release
Friday, Dec 62013, 2:45 PM
Friday, Dec 62013, 2:45 PM| 1 Comment
- The single-family rental payment securitization market could be a $5B one next year, estimates Deutsche, which led the first such deal - one secured by rents from Blackstone (BX) rental homes.
- Deutsche estimates 90K homes have been purchased by institutional investors over the past two years, with Blackstone leading the way, investing about half of the $15B spent. Next up is American Homes4Rent (AMH +2.4%), buying about 19.8K homes for $3.3B, followed by Colony Financial (a unit of CLNY), Silver Bay (SBY +0.2%), Starwood Waypoint (a unit of STWD and prepping to be spun off), and American Residential (ARPI -0.3%).
- Should the securitization market take off as Deutsche expects, it would provide a sizable new source of cheap financing for these players.
Thursday, Nov 212013, 4:24 PM
Tuesday, Nov 192013, 11:51 AM
Tuesday, Nov 192013, 11:51 AM| Comment!
- The rental yield return expected from the single-family rental plays doesn't look too exciting, but Susquehanna's Jack Micenko says the best way to analyze the group is on the value of their home portfolios, with average house age a key factor
- American Homes 4 Rent (AMH -0.4%) is the only one of the group he sees a Buy after calculating a net asset value of $27.75 per share by year-end 2015 vs. today's price of $16.70, and figuring the sector should trade at a 25% discount to NAV.
- Others: SBY, ARPI
Thursday, Nov 142013, 4:10 PM|Thursday, Nov 142013, 4:10 PM| Comment!