Colony Starwood currently runs the portfolio under a management agreement. Nearly 1,900 of the 3,106 properties are in California.

San Francisco-based GI was among the pioneering institutional players in the SFR space, through its 2011 investment in Waypoint Real Estate Group. “As an early institutional investor in the SFR industry, we are gratified in playing a role in turning a cottage industry into a permanent asset class within the $30-trillion US housing market,” says Hoon Cho, managing director at GI Partners. The deal is expected to close in the third quarter.

SCOTTSDALE, AZ—Colony Starwood Homes said Tuesday it had upsized an underwritten public offering of its common stock, proceeds of which will help fund its acquisition of a portfolio of single-family rentals from Waypoint/GI Venture LLC. The $815-million deal for 3,106 properties was announced after the close of trading Monday afternoon.

Originally set at 19,933,187 shares, the offering now consists of consisting of 11,600,000 common shares offered by Colony Starwood, a tally that was upsized from the previously announced 8.5 million common shares, and 11,433,187 common shares offered by certain selling shareholders. The company expects to realize gross proceeds of approximately $806.2 million from the sale, and has granted underwriter Bank of America Merrill Lynch a 30-day option to purchase up to an additional 3,454,978 common shares.

Among the largest transactions the SFR sector has seen in recent months, the sale represents the entirety of GI Partners' Waypoint portfolio. The properties are located entirely within Colony Starwood's existing markets, including Southern California, Northern California, Chicago, Atlanta, Tampa, Phoenix, Miami and Orlando. As of this past March 31, the portfolio was 95.8% occupied with an average monthly rent of $1,703, a figure that's “meaningfully higher than the average of the other public single-family rental REITs,” according to an SEC filing.

“This transaction represents another important growth milestone for Colony Starwood Homes, continuing our focus on increasing scale, enhancing market density and realizing incremental operational efficiencies across our platform,” says Colony Starwood CEO Fred Tuomi. “The GI portfolio acquisition presents an attractive opportunity for the company to efficiently convert a large portfolio of homes from managed to wholly owned assets, all within our current market footprint with concentration in the high-growth California market.”

Colony Starwood currently runs the portfolio under a management agreement. Nearly 1,900 of the 3,106 properties are in California.

San Francisco-based GI was among the pioneering institutional players in the SFR space, through its 2011 investment in Waypoint Real Estate Group. “As an early institutional investor in the SFR industry, we are gratified in playing a role in turning a cottage industry into a permanent asset class within the $30-trillion US housing market,” says Hoon Cho, managing director at GI Partners. The deal is expected to close in the third quarter.