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

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

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.

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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