DivcoWest and Atlas Real Estate target $ 1 billion in single-family rentals
Add DivcoWest and Atlas Real Estate to the growing list of industry players entering the single family rental market.
The two companies have partnered on a billion dollar platform to acquire single-family rental homes across the West, The real deal has learned. The company will renovate and manage properties and target states in the region, including Arizona, Colorado, Idaho, Nevada and Utah.
Investment firm DivcoWest, which focuses primarily on commercial properties, provided $ 250 million. Atlas CEO Tony Julianelle said the platform hopes to reach $ 1 billion in the next 18-24 months; it has already closed its first acquisitions.
The companies are considering urban and suburban homes, with a plan to purchase existing homes from individual owners. The effort can also use rental construction funds, Julianelle said. Denver-based Atlas, which provides real estate management and brokerage services, manages thousands of residential units in the West.
Single-family rentals have become increasingly popular during the pandemic, allowing residents unable to afford a new home with more space and privacy, industry professionals have said. And investors have taken advantage of the trend.
Julianelle called single-family rentals an asset class that “has performed incredibly well during the pandemic, it’s a significant stress test.” He added: “The market was real before and it will continue to be real after, but the pandemic has likely accelerated some of those realities.”
More than 50,000 rental units have been built in the past year ââ a big jump from the 40-year average, according to a recent report.
Last month, home builder Lennar announced it was launching a $ 4 billion platform to acquire single-family homes and townhouses. Over the past year, traditional investment firms like JPMorgan Chase have also invested money in the single-family home rental market.