However, mid-sized players such as Main Street Renewal, (2,282 units to 2,875 units); Altisource Residential (1,022 units to 3,112 units) and Connorex-Lucinda (1,078 units to 1,524 units) all ramped up their buying activity in the past year and picked up the slack.

“Institutional activity in the single-family rental market continues to increase, driven by relatively attractive valuations, modestly strong home price appreciation and stable financing,” says Sandeep Bordia, head of research and analytics at Amherst Capital. “Our data shows that newer entrants and mid-sized institutions accounted for the majority of institutional SFR home purchases over the last year, compared to a slowdown in buying activity among larger institutional holders. We believe that evolving demographics, financial factors and shifting consumer preferences, will keep demand for SFR homes elevated over the coming years.”

A significant trend highlighted in the report is shifting geographical preferences of institutional buyers away from the Western markets to the Midwest and Southeastern states.

Atlanta remained a favorite of institutional buyers, grabbing a 15.5% share in 2015, which is a similar slice of the pie the city secured during 2010-2015. Other Midwest and Southern cities that saw their market share of single-family rental deals increase last year included: Dallas, Charlotte, Indianapolis, Houston, Nashville, Memphis and Kansas City.

Areas that saw market share fall in 2016 included Arizona, California, Nevada and Florida.

“Overall, we believe that the demand for single-family rental homes will remain strong due to a combination of demographic, financial and preference-related reasons,” Bordia states in the report. “In the institutional SFR space, we find the valuations remain relatively attractive.” He adds that public REITS are pricing deals at or above an implied 5% cap rate, while other institutions are securing deals at even higher cap rates.

The recipe of attractive cap rates, modestly strong home price appreciation and cheap financing spreads should result in strong equity returns for institutional players in the single-family rental market.

“We continue to expect that the institutional share in single-family rentals will grow over the coming years—with greater acceptance and appreciation of SFR as an institutionally managed commercial real estate,” the report concludes.