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at MarketWatch.com (Jun 24, 2013)
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American Residential Properties, Inc. is an internally managed real estate company, organized as a real estate investment trust (or "REIT") for U.S. federal income tax purposes, that acquires, owns and manages single-family homes as rental properties. More
Friday, Dec 62:45 PMRental securitization market set to take off, says Deutsche
Friday, Dec 62:45 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 214:24 PM
Tuesday, Nov 1911:51 AMAnalyst: Judge single-family rentals on NAV, not rent yields
Tuesday, Nov 1911:51 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 144:10 PM
Monday, Nov 116:34 PM
Monday, Nov 118:11 AMAMH to offer rental securitization
Monday, Nov 118:11 AM| 3 Comments
- American Homes 4 Rent (AMH) will join Blackstone in offering bonds backed by rental payment streams from its single-family property portfolio. The company board has approved the deal which is expected to more forward within the next 90 days.
- Blackstone got the ball rolling this month, successfully raising $479M backed by rent checks from 3,207 properties.
- Publicly-traded single-family rental businesses have struggled since coming public, but these new securities offer the companies a lower cost of capital. Gamechanger? Sterne Agee - mostly negative on everything housing-finance-related - thinks so.
- Other names of interest: SBY, ARPI.
Monday, Nov 117:41 AMSilver Bay no longer a Buy at JMP Securities
Monday, Nov 117:41 AM| Comment!
- JMP Securities isn't giving Silver Bay (SBY) management any more time to get its single-family rental model clicking, pulling its Buy rating and downgrading to Hold.
- About one year after its IPO - and amid a major stock market rally - Silver Bay is off nearly 14%, and the most recent earnings report and conference call showed a company still unable to get a handle on the expenses of running a rental empire.
- Competitor American Residential Properties (ARPI) is off 14% since its May IPO, and American Homes 4 Rent (AMH) has eked out a near-4% gain since coming public in August.
Friday, Nov 81:12 PMSterne Agee: Investors need to reset expectations for mortgage business
Friday, Nov 81:12 PM| 9 Comments
- "We have two takeaways from the quarter and both are negative," says Sterne Agee of the mortgage finance and servicing sector:
- 1) The land grab is coming to an end, i.e. the easy money (for servicers) from buying MSRs being unloaded by the banks is about done. While regulators want more MSRs out of the banking system, this must be balanced against the GSEs which may be slowing down the approval process as they question the transfer of servicing rights from banks to nonbanks.
- 2) HARP margins are down more than expected and the pipeline of future volumes is slowing.
- Already taking a hit amid disappointing earnings were OCN, NSM, WAC, PMT, WD, and NRZ. "We think it will take two to five days for investors to readjust to the quarter's disappointing news and then investors will need to take a more realistic, long-term view," says the team, which, nevertheless, upgrades Two Harbors (TWO -2.7%) to Buy because of its new mortgage servicing investment.
- Also of interest are the single-family rental shops, SBY, AMH, ARPI amid Blackstone's successful rental securitization. High leverage combined with this new low cost of funds could make for some "exceptionally high" return on equity.
Wednesday, Nov 69:49 PMLeasing picks up as Silver Bay pauses home purchases
Wednesday, Nov 69:49 PM| Comment!
- Silver Bay Realty Trust (SBY): Q3 net operating income of $4.5M gains 44% from Q2 on revenue of $14.5M, up 35%. Standing out are property management fees of $3.7M on rental revenue of $14.5M - that's 25%. It's hard making money in this business with a 10% management fee.
- Estimated net asset value of $19.50 per share up 3% - this measure is based on the company's estimate of fair value of properties. Book value is $17.16 per share, down from $17.30 in Q2.
- The company stopped buying homes in Q3, and 4,521 homes from the owned portfolio of 5,575 homes are now leased, bringing total occupancy to 81% from 65% in Q2. Occupancy for properties owned 6 months or longer rises 200 basis points to 89%.
- Average monthly rent of $1,161 vs. $1,148 in Q2.
- 500K shares repurchased at average price of $15.58 per share.
- CC tomorrow at 9 ET. (PR).
- Shares gained 3.1% in the regular session today as Blackstone's (BX +0.4%) first securitization of rental payments got off to a big start with the company able to borrow more against the assets than had been expected . Other single-family rental stocks: American Homes 4 Rent (AMH +1.8%), American Residential Properties (ARPI +2.4%).
Friday, Nov 12:45 PMBlackstone's home rental bond could send more capital into rental housing
Friday, Nov 12:45 PM| Comment!
- Many eyes will be on Blackstone's (BX +2%) upcoming sale of a bond backed by the rental stream from single-family homes owned by its Invitation Homes unit. The size of the offering is now expected at $479M and is supposed to be coming to market next week, reports the WSJ.
- If successful (and why wouldn't it be amid a quest for any sort of yield), it looks to unlock a whole new wave of capital to be deployed into the sector, not just for Blackstone, but for single-family rental shops like American Homes 4 Rent (AMH +1%), Silver Bay (SBY -0.2%), American Residential Properties (ARPI +0.4%).
- "We're rooting for them," says Richard Saltzman, CEO of Colony Capital (CLNY +1.1%), whose spin-off of its single-family rental unit - Colony American Homes - was dropped this summer amid the dive in REIT prices.
- Back to the Blackstone offering ... There are 3,207 homes whose rents back the paper, with 1,365 of them in Phoenix, about 900 in three different CA cities, 325 in Atlanta, and 257 in Tampa. The ratings on the different tranches range from AAA to junk.
Tuesday, Oct 223:58 PMRayJay updates top REIT picks
Tuesday, Oct 223:58 PM| Comment!
- American Residential Properties (ARPI +1.6%) is added to Raymond James' REIT Priority List - since its introduction 15 years ago, the Priority List has delivered a cumulative return of 249% vs. 181% for the MSCI U.S. REIT Index.
- ARPI is boosted thanks to the team's increasingly positive view on the single-family rental business as well as the valuation - an 18% discount to NAV.
- Removed from the list are CubeSmart (CUBE -1.3%) and Pebblebrook Hotel Trust (PEB +0.3%) after both have strongly outperformed the broader REIT sector YTD.
- Remaining on the list are: Parkway Properties (PKY), Ramco-Gershenson Properties Trust (RPT), Rayonier (RYN), RLJ Lodging Trust (RLJ) and Stag Industrial (STAG).
Tuesday, Oct 2210:33 AMSusquehanna initiates coverage of single-family rental players|Tuesday, Oct 2210:33 AM| Comment!
Friday, Oct 49:07 AMARPI gets more home-buying firepower
Friday, Oct 49:07 AM| Comment!
- American Residential Properties (ARPI) gears up to buy/renovate more single-family homes, adding Citibank as a lender to its credit facility and utilizing the accordion feature to bump the size by $50M to $340M. Further increases could take it as high as $500M.
- Shares are off about 20% since the May IPO as hoped-for returns in the single-family rental business aren't yet panning out.
- Press release.
Tuesday, Sep 244:22 PMOaktreee to exit single-family rental business
Tuesday, Sep 244:22 PM| 11 Comments
- One smart player wants out of trendy buy-to-rent trade, with Oaktree Capital (OAK) and partner Carrington Mortgage Services entertaining bids for their portfolio of single-family homes (about 500). The two had planned to convert the assets into a REIT, but have now decided to simply exit.
- The two started buying properties in early 2012 with a plan to spend $450M building a portfolio, but - after seeing the paltry returns - Oaktree began souring on the idea earlier this year. Rising home prices have created an exit window for Oaktree, and the P-E firm is rushing through it.
- Blackstone (BX) is leading Wall Street's race into single-family landlordship, becoming one of the largest, if not the largest residential property owner in the country. Purer plays include recent IPOs Silver Bay (SBY), American Homes 4 Rent (AMH), and American Residential (ARPI).
Monday, Aug 2610:43 AMSell side weighs in on American Homes 4 Rent
Monday, Aug 2610:43 AM| Comment!
- With the post-IPO quiet period over, the ratings and analyst comments roll in on American Home 4 Rent (AMH -0.2%).
- FBR Capital initiates with a Buy and $19 price target, with analyst Steve Stelmach believing the company offers the most effective single-family opportunity thanks to its scale and structure (internally managed). "At worst, AMH is a portfolio of assets with a cost basis below replacement costs and below NAV ... (and) management and shareholder interests are aligned."
- Wells Fargo initiates with a Hold, believing the company can continue to acquire homes accretively and at below market prices (they make it sound so easy). "However, we believe uncertainties remain in this relatively new market."
- Also rating the company a Buy is JPMorgan.
- Credit Suisse and Bank of America add their names to the Hold contingent.
- Previous: AMH cuts 15% of staff and will slow acquisition activity.
- Interested onlookers will be shareholders of SBY, ARPI, and BX, not to mention Colony Capital (CLNY), which postponed its IPO of Colony American Homes (CAHS) this summer.
Monday, Aug 268:31 AMKass: Housing has blown up
Monday, Aug 268:31 AM| 25 Comments
- "Could there be more evidence in a single day that housing blew up on the rate 'surge' catalyst," asks Doug Kass following Friday's dive in new home sales and word American Homes 4 Rent has cut about 15% of its workforce.
- Hedge funds, P-E firms, and REITs have raised more than $18B to purchase over 100K homes the last two years and - if AMH is any indication - find themselves with a lot more property than they can profitably rent out. It's more than an issue for the companies and their investors - one wonders how much of this unprofitable (and apparently about to slow) activity has boosted the housing stats.
- Other stocks of interest include Silver Bay (SBY) and American Residential Properties (ARPI).
- Housing construction ETFs: XHB, ITB, PKB.
- Homebuilders of note: KBH, DHI, PHM, LEN, RYL, TOL.
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