Koch makes $200M bet on Amherst Holdings’ single-family rentals

Deal closed after Amherst’s attempt to acquire rival Front Yard fell through

National /
May.May 19, 2020 10:16 AM
Sean Dobson of Amherst Holdings CEO and Charles Koch of Koch Real Estate Investments (Credit: Twitter; Koch by Patrick T. Fallon for The Washington Post via Getty Images)

Sean Dobson of Amherst Holdings CEO and Charles Koch of Koch Real Estate Investments (Credit: Twitter; Koch by Patrick T. Fallon for The Washington Post via Getty Images)

Soon after calling off a $2.3 billion deal to acquire a fellow single-family rental landlord, Amherst Holdings has landed a big investment from Koch Industries’ real estate arm.

Charles Koch’s Koch Real Estate Investments has made a $200 million preferred-equity investment in Amherst’s single-family rental business, Bloomberg reported. The deal had been in the works for over a year and closed earlier this month, sources told the publication.

At an 80-percent loan-to-value ratio, the Koch investment will boost Amherst’s home-buying capacity to $2 billion. The Austin-based firm currently operates a portfolio of about 22,000 homes.

The deal may also provide useful relationships with Koch’s consumer and building products arm, whose products could be used for renovations and the development of purpose-made rental homes.

In early May, Amherst announced the termination of a deal to acquire heavily indebted rival Front Yard Residential. Amherst will pay a $25 million termination fee, buy $55 million in Front Yard shares and provide a $20 million unsecured loan.

Koch’s real estate arm also recently provided $206.4 million in senior secured financing to mortgage REIT Ladder Capital to fund transitional and land loans. [Bloomberg] — Kevin Sun


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