GTIS sells $300M single family rental portfolio

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New York-based investment firm GTIS Partners has sold  a 1,081 single family rental portfolio to an
undisclosed buyer for approximately $300 million.

The homes are located across Atlanta, Georgia and Nashville,
Tennessee.

With the sale, GTIS has now completed the disposition of
substantially all the homes it acquired in the wake of the Housing Crisis.  Over the last three and a half years GTIS has
sold 2,630 additional homes to institutional buyers for approximately $400
million and another 376 homes have been sold or are in the process of being
sold through retail channels.

GTIS first entered the SFR space in 2012. Home values were depressed, presenting the opportunity to acquire homes at attractive prices either in foreclosure or through REO acquisitions to be rented until the housing market’s eventual recovery. Since 2012, GTIS has owned and/or managed over 4,700 SFR homes scattered across nine markets. As the recovery progressed and market conditions evolved, GTIS gradually exited its investments in scattered SFR homes and is instead continuing to execute its SFR strategy by developing communities of purpose-built SFR homes or build-to-rent (“BTR”) communities.

TOM SHAPIRO

Tom Shapiro, President and CIO at GTIS, said, “Our SFR
investments have been strong performers to-date and have generated attractive
risk-adjusted returns for our investors. Institutional investor interest in the
asset class has gained momentum and we continue to see strong consumer demand for
SFR product. This sale represents an important milestone for our firm as we
exit the first phase of our SFR platform and shift our focus to providing new
purpose-built rental product to a market that is in desperate need of new, high
quality supply.”

The sale comes as US home purchases by investors rose 2.7
percent year over year in the first quarter, marking the first period of growth
since the coronavirus pandemic began, according to a report from Redfin.

The flurry of business follows three consecutive quarters of
declines, during which investor purchases slumped by as much as 45.5 percent.

Investors bought about one of every seven U.S. homes (14.9
percent) in the first quarter of 2021—a rebound from the prior three quarters,
during which they bought closer to 1 in 10 homes. Investor market share is now
just shy of the 16.1 percent level it hit in the first quarter of 2020, when
the pandemic had barely begun.

Redfin Senior Economist Sheharyar Bokhari said investors
jumped back into the sector as a shortage of homes for sale intensifies. “With
so few houses on the market, many families are resorting to rentals. Flush with
cash, investors are able to snap up the homes that are available, and then turn
around and rent them out to folks who can’t find a home or are priced out of
homeownership,” said Bokharo.

“This is likely making the housing shortage even worse, and
also means that individual homeowners sometimes end up competing with investors
in bidding wars.”

Investors initially pumped the brakes at the beginning of
the pandemic because the housing market had ground to a halt. The market then
came roaring back, but investors were slower to rejoin the party, likely due to
lingering economic uncertainty. Many investors purchase homes with the
intention of renting them out, so when rents plunged, unemployment skyrocketed
and evictions were halted due to the pandemic, some opted for a cautious
approach.

While investors have been buying more single-family homes
during the pandemic, they still have the biggest market share in the
multifamily sector. They bought a quarter (25.8 percent) of multifamily
properties that sold in the U.S. during the first quarter. By comparison, they
purchased 14.8 percent of both single-family homes and condos, and 12.5 percent
of townhomes.

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