It should have been a short-term play. Shareholders should purchase thousands of on sale basement single-family houses during the stage of foreclosure, rent them out for years and then sell them off.
Anyway, that's what the critics thought; although that is not how this still-nascent type of real estate is running. Aside from the large players who are joining, these could make the stocks left potentially standing and more encouraging.
The previous announcement about a merger between Arizona-based American Residential Properties and American Homes 4 Rent, which owns 8,938 rental homes and the latter, 38,377, was the number three deal in last year's asset class. The merged company will own and operate 22 states homes, and is forecasted to have an equity market capitalization of $5.5 billion, according to Dec. 2 closing prices.
In the early part of 2015, Silver Bay Realty Trust agreed to purchase the complete Atlanta-based portfolio, the American home that has 2,460 rental homes in three states. Aaron Edelheit, ex-CEO of The American Home said, "This is the natural evolution of how the industry is growing up."
Thomas J. Barrack Jr., Colony American Homes' parent Colony Capital's Executive Chairman explained, "We believe this merger demonstrates the power of scale and consolidation and really crystallizes the long-term durability of the single-family rental industry." He will function as a non-executive co-chairman of the merged firm along with Mr. Sternlicht.
Starwood Waypoint said the firm and other institutional investors roughly owned U.S. Rental Homes, 200,000 of the 15.3 million in June, implying notable room for development if other situations are ripe.
The two firms believe that a merger will give a good end result of $50 million in rate reductions. Colony investors will have 59 percent of the integrated firm's shares, if the deal pursues; at the same time, Starwood Waypoint shareholders would have 42 percent. Starwood Waypoint would release new shares as part of the said deal.
