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Mega-Merger Augurs Deeper SFR Inroads

Institutions still control less than 2% of the $3.1-trillion single-family rental sector in the US. That appears likely to change in the near term.

By Paul Bubny | paulbubny | Updated on August 11, 2017

Exterior of rental home A Starwood Waypoint rental property in Orlando, one of about 82,000 that will be under the combined company’s ownership.

DALLAS—Among single-family rental landlords, the post-merger Invitation Homes will overshadow the current top dog, American Homes 4 Rent (AMH), by more than half. It will control about 82,000 rental properties, compared to the 49,000 now owned by AMH.

Beyond potentially representing the SFR sector’s debut in the S&P 500—the merger of Invitation Homes and Starwood Waypoint Homes will create a REIT with an enterprise value just behind that of HCP—the deal announced Thursday may signpost a broader trend. That is to say, further inroads by large institutional players into what remains a sector largely in the hands of small-scale, local operators.

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