American Homes 4 Rent to drum up funds with novel “price appreciation” shares

New York /
Sep.September 06, 2013 05:01 PM
 

A major buyer of single-family rental homes is looking to raise funds by offering investors an unusual incentive – a chance to benefit from appreciation of the property.

American Homes 4 Rent, which raised $811.8 million in a June initial public offering, plans to sell preferred shares that will rise in value as its rental homes appreciate, according to a filing yesterday with the U.S. Securities and Exchange Commission seen by Bloomberg News. The company – which is second only to Blackstone Group in its single-family rental portfolio — is looking to raise about $100 million, an amount that may be subject to change.

The participating shares “have an initial liquidation preference of $25 per share, which may be increased by an additional Home Price Appreciation Amount” which factors in home prices in the company’s 20 largest markets, according to the filing.

The company recently cut staff after seeing a second quarter loss.

Private equity firms, real estate investment trusts and hedge funds have raised north of $18 billion to buy more than 100,000 rental houses in the last two years, tapping into the sharp drop in housing prices from the 2006 peak and the growing demand from people unable to afford buying a home. [Bloomberg News]Hiten Samtani


Related Articles

arrow_forward_ios
President Joe Biden and New York State Senator Brian Kavanagh. (Getty, Department of Treasury)
Federal guidelines could complicate state’s rent relief rollout
Federal guidelines could complicate state’s rent relief rollout
As the economy rebounds, rental prices are following suit. With the eviction ban recently overturned, that spells trouble for tenants who are struggling to make ends meet. (iStock)
Rents rise across country as economy rebounds
Rents rise across country as economy rebounds
RGB chair David Reiss (iStock, Brooklyn Law)
City board considers rent hike in preliminary vote
City board considers rent hike in preliminary vote
U.S. District Court Judge Dabney Friedrich (Senate/Chris Coons, iStock)
Judge strikes down federal eviction ban
Judge strikes down federal eviction ban
(Getty, iStock/Illustration by Alexis Manrodt for The Real Deal)
Renters prepare for eviction crisis as aid is held up
Renters prepare for eviction crisis as aid is held up
A rendering of One Boerum Place with Avery Hall Investments' Avi Fisher (top) and Brian Ezra (SLCE Architects, Avery Hall Investments)
Shifting gears: Brooklyn condo tower to debut as rental
Shifting gears: Brooklyn condo tower to debut as rental
Mayor Bill de Blasio (Getty)
City rent board missing landlord rep ahead of preliminary vote
City rent board missing landlord rep ahead of preliminary vote
Stimulus payments, the vaccine rollout, low inventory of homes for sale and the recovering economy likely contributed to landlords accelerating the pace of rent increases last month. (iStock)
Rent hikes are back
Rent hikes are back
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...