Dealmaker: JLL Income Property Trust Invests $560M in Single-Family Rental Portfolio

JLL Income Property Trust, Chicago, acquired a 47 percent interest in a large single-family rental portfolio for $560 million.

The 4,000-plus home portfolio was assembled in a venture with institutional investor Amherst Residential, Austin, Texas. JLL Income Property Trust’s $560 million investment represents a $1.2 billion portfolio valuation.

JLL Income Property Trust President and CEO Allan Swaringen said the portfolio represented an opportunity for the real estate investment trust to enter the single-family rental market at scale through a previously acquired, renovated and stabilized portfolio with nationwide diversification. He said LaSalle’s Research and Strategy team has identified single-family rentals as a ‘near-core’ property sector poised for accelerating institutional capital inflows along with an attractive risk-adjusted return profile. “Given the superior long-term tenant demand growth outlook, our research projects long-term expected rent and net operating income growth above all other institutional property type averages,” he said.

The portfolio includes properties in 14 major markets in 10 states. Nearly 80 percent of assets are in the Atlanta, Dallas, Phoenix, Nashville, Charlotte and Tampa markets. “This broadly diversified portfolio offers a compelling risk-return profile relative to traditional large-scale apartment communities given limited asset-specific risks as compared to the traditional supply and geographic risks inherent with numerous units concentrated in one location,” JLL Income Property Trust said. The portfolio is more than 96 percent occupied with no displacement anticipated as a result of the transaction.

JLL Income Property Trust funded the investment with $205 million of equity and by assuming a proportionate share of in-place financing–a $761 million securitized loan, interest-only at a fixed 2.1 percent rate. The portfolio loan-to-value ratio equaled 63 percent at the current valuation.

Amherst Residential owns and operates more than 30,000 single-family rental homes in 30 markets and 20 states, the fourth largest single-family rental platform in the U.S. JLL Income Property Trust now holds more than $4.5 billion in portfolio assets.