Tricon Residential Inc. said it has formed a joint venture (SFR JV-2) with three institutional investors to acquire single-family rental homes targeting the middle-market demographic in the U.S. Sun Belt.
The joint venture will serve as the successor to Tricon’s existing single-family rental joint venture, 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 $1.40 billion and include the ability for investors to increase the vehicle size to $1.55 billion, including Tricon’s co-investment of $450 million, representing approximately $5 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,” said Gary Berman, President and CEO of Tricon Residential. “Tricon has now raised $2 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.”
“With the closing of this joint venture, Tricon is well positioned to accommodate the incredible demand we are seeing across the U.S. 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,” said Gary Berman.
“We are excited to expand our partnership with Tricon after a very successful investment program in our first Joint Venture”, said 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,” added Grant Walker, Senior Director of Real Estate, Teacher Retirement System of Texas.