Nontraded real estate investment trust JLL Income Property Trust paid Austin, Texas-based Amherst Residential and an institutional-investor partner $560 million to acquire a 47% interest in a single-family rental portfolio, including homes in Atlanta.
The 4,000-unit portfolio, acquired at a total valuation of $1.2 billion, includes houses in 14 markets in 10 states. Besides Atlanta, markets include Dallas; Phoenix; Nashville, Tenn.; Charlotte, N.C.; and Tampa, Fla. The assets are 96% leased, and JLL Income Property Trust does not anticipate any disruptions to follow the transaction.
“This is a unique and attractive opportunity for us to enter the single-family rental market at scale through a previously acquired, renovated and stabilized portfolio with broad nationwide diversification,” JLL Income Property Trust President and CEO Allan Swaringen said in a press release. “LaSalle’s research and strategy team has identified single-family rentals as a ‘near-core’ property sector poised for accelerating institutional capital inflows, along with an attractive risk-adjusted return profile. Given the superior long-term tenant demand-growth outlook, our research projects long-term expected rent and net-operating-income growth above all other institutional property-type averages.”
The acquisition was funded by approximately $205 million of equity and the assumption of a $761 million securitized loan, interest only, at a fixed rate of 2.1%, maturing at the end of 2025. At the current valuation, the portfolio’s loan-to-value ratio is approximately 63%, the Houston-based REIT said in the release.