Home-Rentals Wall Street Made Say Grow or Go: Real Estate
By Heather Perlberg and John Gittelsohn Jul 23, 2014 12:02 PM ET
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 didn’t 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.
Wall Street Is My Landlord
“That consolidation phase will be bigger than the original buy phase,” Tom Barrack, whose Colony American Homes is the third-largest single-family landlord, said during an interview today at Bloomberg’s Los Angeles bureau. “Now we’ll sweep up everybody over the next two years who got stuck, who says I have home price appreciation, which they do. They bought right, but now they are stuck.”
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http://www.bloomberg.com/news/2014-07-23/home-rentals-wall-street-made-say-grow-or-go-real-estate.html
