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October 23, 2014

Single-Family Rental Companies Race to File IPOs

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Single-Family Rental Companies Race to File IPOs

Waypoint Homes Realty Trust Inc. becomes the latest single-family rental company to announce plans to raise up to $100 million in an IPO.

“The race is on to raise money on public capital markets for the latest big thing in real estate: renting out single-family homes,” The Wall Street Journal reports. 

Waypoint is the fifth single-family rental landlord to file an IPO in the last year. In December, Silver Bay Realty Trust Corp. became the first such company to trade publicly, followed soon after by Altisource Residential Corp. 

Many more companies are expected to follow suit. For example, American Homes 4 Rent, based in Malibu, Calif., announced Feb. 27 that it intended to file an IPO—although it has not yet gone public. Analysts have anticipated that the Blackstone Group—a major player in the single-family rental market that has acquired nearly 25,000 homes within the last two years—will soon debut its Invitation Homes rental business on the public markets. 

The IPOs are structured as real estate investment trusts, or REITs. 

As of March 1, Waypoint owned 3,552 homes, which the company says it acquired at an average cost of $132,666. It spent, on average, about $22,887 on home renovations. The company says its average rent for the homes is $1,742, posting an average gross yield of 13.2 percent. 

Waypoint Homes will trade under the ticker “WAY” on the Nasdaq. 

Source: “Waypoint Files for Latest Foreclosure-to-Rental IPO,” The Wall Street Journal (May 21, 2013)

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