Amherst Capital Market Update: Increasing Institutional Ownership of Single-Family Rental Homes Solidifies SFR as a Long-Term Asset Class
Amherst Capital Estimates that Institutional Investor Ownership of SFR Homes Surpassed 200,000 Homes and $33 Billion in Holdings in 2016, as Institutions Continue to Capture a Growing Share of the SFR Market(1)
Amherst Capital Data Finds that Mid-Sized Institutions are Increasing SFR Market Share While Larger Institutions Slow SFR Home Purchases; Institutions Increasingly Favor Southeast and Midwest Markets
NEW YORK, Oct. 2, 2017 /PRNewswire/ -- Amherst Capital Management LLC, a BNY Mellon investment boutique specializing in U.S. real estate, today released a new paper, "U.S. Single Family Rental—Institutional Activity in 2016/2017," which finds that institutional ownership of single-family rental (SFR) homes surpassed 200,000 homes in 2016,2 as institutional investors continue to capture a growing share of the SFR market. According to Amherst Capital data, total institutional investment in SFR homes reached $33 billion at the end of 2016.
To read the complete paper, "U.S. Single Family Rental—Institutional Activity in 2016/2017," click here.
"Institutional activity in the SFR market continues to increase, driven by relatively attractive valuations, modestly strong home price appreciation and stable financing," said Sandeep Bordia, Head of Research and Analytics at Amherst Capital. "Our data shows that newer entrants and mid-sized institutions accounted for the majority of institutional SFR home purchases over the last year, compared to a slowdown in buying activity among larger institutional holders. We believe that evolving demographics, financial factors and shifting consumer preferences, will keep demand for SFR homes elevated over the coming years."
In the paper, which is backed by comprehensive data and analysis, Amherst Capital describes several notable shifts occurring in the SFR space, including:
Newer entrants and mid-sized institutions have increased market share of institution-owned SFR homes, compared to a buying slowdown among larger institutions.
Institutional SFR buying shifted geographically to the Southeast and Midwest U.S., away from Western markets prioritized by early SFR entrants.
Recent institutional SFR activity demonstrates the differences in strategy between public REITS and private mid-sized institutions.
We believe demand for SFR homes will remain strong.
"Amherst Capital's differentiated SFR strategy is an important component of our commitment to provide attractive real estate opportunities to institutional investors," said Sean Dobson, CEO and CIO at Amherst Capital. "SFR is increasingly recognized as a stable, long-term, institution-owned CRE asset class. Backed by our leading analytics and vertically-integrated approach, we believe we have built a strong offering in the asset management industry."
About Amherst Holdings
Amherst Capital Management is minority-owned by Amherst Holdings LLC, which recognized early-on that the U.S. housing market would undergo a secular shift away from homeownership toward single-family home rental and began purchasing and leasing homes in 2010. Through Main Street Renewal, Amherst Holdings' vertically integrated property manager, the firm acquires, manages and maintains SFR homes. Overall, MSR provides property management services to more than 12,000 homes across 18 markets.
About Amherst Capital Management Amherst Capital Management LLC is a real estate investment specialist with approximately $6.1 billion of assets under management3. Amherst Capital was established in 2014 as a majority-owned subsidiary of BNY Mellon, and is minority-owned by Amherst Holdings, LLC. Amherst Holdings is not an affiliate of BNY Mellon. Texas Treasury Safekeeping Trust Company is a founding seed investor of Amherst Capital4. Amherst Capital offers traditional and alternative real estate investment strategies to private and institutional investors globally. Amherst Capital's investment strategies are grounded in deep intellectual capital and proprietary technology designed to help clients meet their portfolio needs. For more information please visit www.amherstcapital.com
About BNY Mellon Investment Management
BNY Mellon Investment Management is one of the world's leading investment management organizations and one of the top U.S. wealth managers, with $1.8 trillion in assets under management as of June 30, 2017. It encompasses BNY Mellon's affiliated investment management firms, wealth management services and global distribution companies. BNY Mellon Investment Management is a division of BNY Mellon which has $31.1 trillion in assets under custody and/or administration as of June 30, 2017. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.
All information source BNY Mellon as of December 31, 2016. This press release is qualified for issuance in the US only and is for information purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorized. This press release is issued by BNY Mellon Investment Management to members of the financial press and media and the information contained herein should not be construed as investment advice. Past performance is not a guide to future performance.
1 Source: Estimated by Amherst Capital based on Federal Reserve Z.1 release as of June 9 2016; and MSCI, SIFMA data; and data from the National Multifamily Housing Council. 2 Source: Amherst InsightLabs estimates based on Corelogic County Record and Transaction Data as of Q4 2016. 3 As of June 30, 2017. This amount includes $4.5 billion assets pertaining to certain discretionary multi -sector fixed income clients of our affiliate Standish Mellon Asset Management Company, LLC ("Standish"), for which certain Amherst Capital employees provide advice acting as dual officers of Standish. In addition, discretionary portfolios with approximately $396 million are managed by certain of our employees in their capacity as dual officers of The Dreyfus Corporation. AUM includes gross assets managed in the single family equity and commercial real estate strategies, which include $244 million of leverage and $17 million of leverage, respectively. 4 It is not known whether the listed client approves or disapproves of the adviser or the advisory services provided.