Wall Street landlords aren’t going anywhere — except maybe down South.
The asset management arm of JPMorgan Chase wants to raise a $700 million fund focused on developing single-family and multifamily rental properties in Sun Belt cities, Bloomberg reported, citing an investor presentation.
The financial giant is in talks with investors who may be overexposed to investments in gateway markets such as New York City and San Francisco. The fund would target developments in Atlanta; Houston and Austin, Texas; and Charlotte and Raleigh, North Carolina.
Rentals are not a new area for JPMorgan’s real estate team; the division has $65 billion in assets under management, with 52,000 rental units.
Single-family rentals in particular emerged as an asset class during the last recession, when Wall Street firms were able to scoop up foreclosed properties. The pandemic has led some of those companies (including JPMorgan Chase, which partnered with American Homes 4 Rent to develop more than 2,000 single-family rentals) to double down on such investments: Record unemployment rates and high household debt means many renters may remain renters, and some homeowners may look to cash in for equity. Plus, the ability to work from home has led some city dwellers to relocate to the suburbs.
Not everyone is sold on that thesis, however. During the second quarter of this year, major hedge funds purchased shares of firms that lease residential real estate in urban markets.
[Bloomberg] — Danielle Balbi