SVN partners with Walton Global on build-to-rent venture

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Walton CEO Bill Doherty and SVN | SFR Capital Management CEO Jeff Cline (Walton, SVN | SFR)

Walton CEO Bill Doherty and SVN | SFR Capital Management CEO Jeff Cline (Walton, SVN | SFR)

SVN | SFR Capital Management and Walton Global Holdings USA are charging head first into the single family rental space.

The firms on Thursday announced a joint venture to construct and operate communities of single-family rentals nationwide. The partnership said it will work with a homebuilder to build a large-scale portfolio of such communities and will complete its first ones in Colorado and Texas next year.

Investment is flooding into the single family rental space, with transactions estimated at more than $18 billion between January and June, according to John Burns Consulting. Private equity behemoth Blackstone recently acquired Home Partners of America for $6 billion.

Some firms are targeting existing homes off the multiple listing service, while others focus on building new communities. SVN | SFR, which falls into the latter category, plans to aggregate about 35,000 new build-to-rent homes in the near term with $2 billion in equity and debt from institutional investors.

Walton focuses on pre-development land.It has $3.4 billion in assets under management and an 81,000-acre portfolio.

“Our joint ventures have access to an established pipeline that’s growing,” Walton CEO Bill Doherty said in a statement.

In 2019, Bloomberg News reported that a number of investors claimed that the rural communities that a Walton-affiliated company was supposed to build with their money had not materialized. Most of more than 300 Walton land projects, from Alberta to Washington, were delayed, as were the expected payouts to investors, according to Bloomberg.

Single-family rentals have performed exceptionally well during the pandemic as people searched for more interior space and yards. Rising home prices have also put homeownership out of reach for millions of Americans, making renting the only alternative.

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