Atlas Real Estate and DivcoWest have formed a $1 billion joint venture to acquire, renovate and manage single-family rental homes throughout the American West, signaling the latest entry into the skyrocketing SFR market and marking DivcoWest's official entrance into the sector. 

As part of the deal, San Francisco-based DivcoWest will invest $250 million of equity. The joint venture expects to deploy a total of $1 billion acquiring and renovating homes in high-growth states like Colorado, Arizona, Idaho, Nevada and Utah, where Atlas currently manages more than 4,200 units.

The SFR market—traditionally the purview of smaller investors—has emerged as a stable, relatively safe investment vehicle in the COVID era, and growth in the sector is expected to eclipse multifamily, office, retail, storage, and hospitality growth by 2022, according to Walker & Dunlop data. The firm estimates the SFR market to be valued at around $3.4 trillion.