The Real Deal Miami

Big owners of single-family rental homes set to merge

Deal would combine Starwood Waypoint Residential Trust and American Colony Homes Inc.

October 03, 2015 02:00PM

  • Print
The two companies own more than 30,000 rental homes.

The two companies own more than 30,000 rental homes.

Two large owners of single-family rental homes, Starwood Waypoint Residential Trust and Colony American Homes Inc., have agreed to merge amid a strong market for rental homes.

“We believe this merger demonstrates the power and scale of consolidation and really crystallizes the long-term durability of the single-family rental home industry,” said Thomas J. Barrack Jr., executive chairman of Colony Capital, the parent company of Colony American Homes.

Closely held Colony American and Starwood Waypoint, a publicly traded real estate investment trust, own a combined total of more than 30,000 homes valued at almost $8 billion.

The directors of both companies have approved the merger agreement, which is expected to close in the first quarter of 2016.

nder the terms of the agreement, Colony shareholders will receive about 65 million shares of Starwood Waypoint. The deal has been approved by the boards of both companies and is expected to close in the first quarter of next year.

Barrack and Barry Sternlicht, who runs Starwood Waypoint, were part of a wave of foreclosed-home purchases by big investors after the collapse of the domestic housing market in the late 2000s. These distress sales were concentrated in areas hit hardest by the housing downturn, including South Florida, Atlanta, California and Phoenix.

Though the flood of foreclosures has slowed, stringent lending criteria have forced millions of Americans to rent their homes rather than own them.

Moody’s Analytics reported that rentals comprise 13 percent of the stock of single-family homes, up from 9 percent in 2005. [Wall Street Journal] — Mike Seemuth