Home-Rentals Wall Street Made Say Grow or Go: Real Estate
July 23, 2014
By Heather Perlberg and John Gittelsohn
Alexander Philips joined the rush to buy foreclosed U.S. homes four years ago, spending $40 million on houses in California and Nevada to operate as rentals. Now his firm, Twinrock Partners LLC, is getting ready to sell.
We didnt want to be the last one standing when the music stopped, Philips, 38, said in a telephone interview. We view this as a trade, not as a business.
The U.S. home-rental industry, transformed over the past two years by Wall Street-backed companies that were built on the rubble of the housing crash, is poised to be reshaped again as landlords like Philips get out. Corporate owners with limited capital or deadlines to repay investors are now selling houses in bulk, or one by one, after a 26 percent surge in prices from a March 2012 low. For bigger firms, swallowing smaller competitors is among the best opportunities for growth as they shift their focus to managing scattered properties.
Smaller players are going to continue to fall behind, said Justin Chang, chief executive officer of Scottsdale, Arizona-based Colony American Homes, the third-largest single-family landlord. Even though were only a couple of years in, its clear were seeing the benefits of scale.
http://www.bloomberg.com/news/2014-07-23/home-rentals-wall-street-made-say-grow-or-go-real-estate.html
The U.S. home-rental industry, transformed over the past two years by Wall Street-backed companies that were built on the rubble of the housing crash, is poised to be reshaped again