– Consolidation of Single-Family Home Rentals Reflects New Phase in the Industry –
ROCHESTER, N.Y. – Broadtree Homes (Broadtree), a private real estate investment company managed by Broadstone Real Estate, LLC, has acquired 127 single-family rental homes from The Dominion Group for a total purchase price of approximately $10 million. The transaction closed on Tuesday, June 24. Broadtree plans to acquire up to an additional 50 homes under the current contract, bringing the total acquisition price to $14 million. The purchase will strengthen Broadtree’s holdings and establish a meaningful and well-defined portfolio of rented homes in the recovering and robust Atlanta, Ga. market.
The Dominion Group, headquartered in Baltimore, Md., will invest a significant amount of the sale proceeds into shares of Broadtree Homes, and will continue to partner with the company to manage the Atlanta portfolio and provide additional homes for possible future Broadtree acquisition. The deal structure aligns incentives between the local operating platform of Dominion and the institutional oversight and capital markets expertise of Broadtree.
“We are delighted to have found a partner with a long term track record and approach to this business – one that fits with our company’s culture and outlook on the single family industry,” said Broadstone Real Estate CEO, Amy Tait. “We believe that our strategy of consolidating portfolios of renovated and leased homes is the model for the future of the industry.”
“It’s a great portfolio,” said Fred Lewis, principal and founder of the Dominion Group. “We hand-picked each property and renovated them with a long term view to ownership. We’re excited to provide on-going property management services and like the fact that we will participate in the future performance of the portfolio as shareholders in Broadtree Homes.”
With more than 14 million single-family home rentals in the U.S and only 250,000 (less than 1.8%) currently owned by institutional investment companies1, the market is ripe for deliberate consolidation. The single-family home rental market is poised to grow, considering the current state of housing:
- The homeownership rate has dropped every year for the last nine years2
- Since 2006, there has been a net loss of 1.75 million homeowner households2
- During the same period, there has been a net gain of 5.77 million renter households2
- Single-family rental homes now serve over 12% of the households in the U.S.3
The principals at Broadstone Real Estate established Broadtree Homes to take advantage of the opportunities in this evolving sector. The consolidation and institutionalization of the single family rental industry in many ways mirrors how the multifamily apartment sector evolved over the past three decades, where company founders, Amy Tait and Norman Leenhouts, participated in the founding and leadership of Home Properties, (NYSE: HME), an apartment REIT that went public in 1994*.
“As the homeownership rate in the U.S. continues to drop back to more sustainable levels, we believe that families will increasingly continue to turn to single-family home rentals to provide them the opportunity to live in quality suburban homes, without the financial concerns and limitations of homeownership,” Tait said. “Our goal is to address that demand and create an institutional-quality investment class, providing an exciting new opportunity for long-term real estate investors. We are pleased to participate as leaders in the consolidation phase of single-family home rentals.”
About Broadtree Homes
Broadtree Homes is a private real estate investment offering managed by Broadstone Real Estate, LLC, a certified Women’s Business Enterprise (WBE). Broadtree seeks to acquire portfolios of stabilized, single-family rental homes in multiple markets across the U.S., and currently holds a diversified, geographically dispersed portfolio of homes in Western New York; Palm Beach County, Florida; the Atlanta, Georgia area; and the Greater Minneapolis, Minnesota area.
Company leadership is excited to offer accredited investors a chance to participate in the consolidation of this emerging, underserved asset class, without the effort and risk of becoming a direct landlord. The offering is open for investment by accredited investors, with a minimum initial investment of $50,000. For more information, visit the Broadstone website at www.broadstone.com or contact a member of the firm’s Investor Relations team.
2 Originates from Census data http://www.census.gov/housing/hvs/data/histtabs.html
3Single-Family REO: An Emerging Asset Class, 3rd Edition”, KBW; Sept. 10, 2013
*Broadstone Real Estate, its principals and affiliated REITs are not currently affiliated with Home Properties, Inc.