SFR - Starwood Capital considers selling more than 2000 single-family rental homes - report

2023-06-13 16:10:20 ET

Starwood Capital Group is considering selling more than 2,000 single-family rental homes, many of which it acquired from Pretium Partners in late 2021, according to a media report.

Many of the homes being offered for sale by Starwood Real Estate Income Trust were part its acquisition of 2,300 homes it acquired from Pretium, Bloomberg reported Tuesday, citing people familiar with the matter.

Pretium is buying back about 100 homes, the people told Bloomberg. The sales aren't being made at distressed prices and Starwood may choose to hold onto most of the homes being considered for sale, they said.

SREIT owned 3,210 single-family rental homes valued at ~$1.26B as of March 31, 2023, the company disclosed in an SEC filing . But Starwood also owns single-family rental homes that aren't part of SREIT.

During Q1, SREIT recorded a $79.8M impairment on some single-family rental properties due to "an increased probability of a near-term disposition.

Like Blackstone Real Estate Income Trust (BREIT), SREIT has been receiving elevated requests for redemption. In April, it received redemption requests equal to 4.2% of its aggregate net asset value. It met 47.7% of those repurchase requests, it said in its Q1 10-Q.

Some real estate trusts are deciding to sell properties that have fared better in the real estate market slump. Bloomberg reported that  on a conference call in May, Barry Sternlicht said, "Single family and multifamily is doing fine. The only issue is office."

About a year ago, Bloomberg reported that Starwood Capital Group was considering selling two portfolios of single-family rental homes totaling ~3,000 properties.

Some publicly traded single-family companies include Invitation Homes ( INVH ), American Homes 4 Rent ( AMH ), Tricon Residential ( TCN ), Bluerock Homes ( BHM ), and NexPoint Diversified ( NXDT ).

Earlier this month, Redfin said U.S. real estate investors bought 49% fewer homes Y/Y in Q1.

SA Investing Group Leader Philip Eric Jones uses his FROG-hunting approach to pick out a winner in the SFR space.

For further details see: