Tricon Capital Group has entered into a joint venture agreement with two leading institutional investors to create a portfolio of single-family rental homes that will be acquired and managed by Tricon American Homes (TAH).
The investors include one of the world’s largest sovereign wealth funds and one of the largest state pension plans in the United States.
Tricon and the two investors have each committed to invest $250 million for a one-third interest in the joint venture. The total equity commitment of $750 million will enable the joint venture to acquire approximately 10,000 to 12,000 single-family rental homes expected to be valued at approximately $2 billion when including associated leverage. Leverage will not exceed 65 percent loan to value.
Acquisitions will be focused on homes in TAH’s active markets, primarily located in the U.S. Sun Belt, with similar investment parameters to TAH’s current acquisition program and a continued strategy of targeting “middle market” households. Following a three-year investment period, the homes will continue to be managed by TAH over a five-year hold period, for a total term of eight years.