The 2008 housing crisis birthed the institutionalized single-family rental market, and the coronavirus crisis is bringing the space to maturity.
Throughout 2020, though, institutional single-family real estate investment trusts have generated outsized returns and attracted huge flows of institutional money from giants like Brookfield and JP Morgan, while companies big and small have developed new ways to acquire and market homes. , a commercial real estate research firm, as of September the sector has seen $5.8 billion of commercial mortgage-backed securities deals, already $2 billion more than in all of 2019.
The largest of these companies, Invitation Homes, is also reportedly gearing up to enter the sale-leaseback category, using their new cash to buy out homeowners and turning them into renters. Whether it's a homeowner with a cash infusion or someone who can't afford to buy the white-picket fenced suburban home of their dreams, many more Americans may soon see Wall Street become their neighbor.
"For institutional real estate investors looking for other alternatives, it is now earning the recession-resilient label," John Pawlowski of Green Street Advisors, a leading analyst and research firm in commercial real estate, told Business Insider. In October of this year, Invitation Homes announced a joint venture with real estate investor Rockpoint Group to purchase more than $1 billion of homes, or about 3,500 locations, with a combination of debt and equity.
Meanwhile, private-equity giant Blackstone, which launched Invitation Homes during the financial crisis and exited it last year,with a $240 million investment in Canadian single-family rental company Tricon Residential. Supply has tightened since the industry got its start, leading operators to turn to new avenues to get homes. iBuyers like Opendoor have provided one sales channel for single-family rental companies, and the largest operators have been able to buy portfolios in bulk from the many, smaller operators.in 2020, brought on by the pandemic and low interest rates.