Walton forms build-for-rent joint venture with SVN|SFR
Walton Global Holdings USA, a Scottsdale-based global real estate investment and land asset management company with $3.4 billion in assets under management, and SVN | SFR Capital Management (SVN | SFR), a private commercial real estate investment firm dedicated to the single-family build-for-rent housing sector, announced the formation of a joint venture that will construct and operate build-for-rent single-family residential rental home communities nationwide.
The partnership anticipates new construction of multiple Build-for-Rent communities annually over the next several years. The first purpose-built communities are slated to commence development in 2022 in Colorado and Texas that will be constructed by a homebuilder selected by the joint venture partners for aggregation into a large-scale portfolio of rental home communities.
“Partnering with Walton is an exceptional opportunity to leverage and collaborate across our collective land, development, homebuilding, asset management and rental home operating platform to provide residents in the U.S. with quality, affordable housing in beautiful, well located master-planned communities,” said Jeff Cline, CEO of SVN | SFR Capital Management. He added, “With the continuing shortage of affordable homes and strong projected rent growth, we believe timing in the marketplace, land access and our strategic vision will lead us to become a leading group in the Build-for-Rent investment segment.”
According to Bill Doherty, CEO of Walton “Acquiring land in growth areas is one of the industry’s biggest challenges.” He added, “Our 81,000-acre land portfolio offers availability of land and lots that is unique in this industry. Our more than 180 master plans in the U.S. have been acquired years in advance, so our joint ventures have access to an established pipeline that’s growing. We also recognize that all metros are not created equal; each metro has its own unique needs and requirements. Our Build-for-Rent program is based on a highly strategic, selective approach. We are searching for key partners that meet certain criteria in various areas across the country to execute our plan. We are very pleased to be working with SVN as one of our select partners.”
COVID-19 has tested and proven the strong financial performance and occupancy growth in the single-family rental home sector. Based on the largest public, single-family rental and Build-for-Rent transactions, John Burns Real Estate Consulting estimates total 2021 transactions (from January through June) to be over $18 billion. Equity investment in the space is expected to grow in 2022 and 2023.
With demand for single-family housing and Build-for-Rent developments at an all-time high across population segments (including millennials, young families with children and baby boomers), all of whom are seeking space, location and professional home management, the joint venture is targeting additional land development communities in key markets across the country.