CalSTRS venture will invest $1B in build-to-rent homes

Pension fund and Pacific Coast Capital Partners will target existing properties and develop new ones in fast-growing sector

National /
Mar.March 17, 2021 10:01 AM
CalSTRS CEO Jack Ehnes and PCCP partner Jim Galovan (Photos via iStock, CalSTRS, PCCP)
CalSTRS CEO Jack Ehnes and PCCP partner Jim Galovan (Photos via iStock, CalSTRS, PCCP)

The nation’s second largest public pension fund and an investment firm are placing a big bet on build-to-rent housing.

California State Teachers’ Retirement System and Pacific Coast Capital Partners have formed a $1 billion joint venture to invest in the fast-growing single-family housing sector, according to the Los Angeles Business Journal.

The venture will focus on build-to-rent communities in primary and secondary markets across the country. It will acquire existing properties and construct new single-family developments.

CalSTRS and PCCP have so far paid $240 million for five build-to-rent properties in Atlanta; Jacksonville, Florida; Nashville, Tennessee; and Raleigh, North Carolina.

“With a nationwide shortage of single-family housing supply, we see the strongest demand for the [build-for-rent] sector coming from millennials and baby boomers,” PCCP’s Jim Galovan said in a statement. The duo is targeting homes between 1,200 square feet and 2,000 square feet, which Galovan said are in particular demand among renters because of their price point.

The pandemic has led to a surge in demand for housing outside urban areas, and has also pushed prices up. A growing number of individuals and families who have struggled with social distancing in large apartment buildings are opting for more indoor and outdoor space in the suburbs once their leases are up.

Investors are seeing opportunity. Firms like NexMetro, Brookfield Asset Management, and American Homes 4 Rent are also betting big on the build-to-rent sector.

More than 50,000 build-to-rent homes were constructed in the 12 months ending on Sept. 30, according to a recent report. That was 66 percent more than the average over the last 40 years.

Last week, developer Quinn Residences said it was planning to construct 8,000 build-to-rent houses in the Southeast after a $500 million commitment from an investor. [LABJ] — Dennis Lynch 


Related Articles

arrow_forward_ios
(iStock)
SoCal home prices keep rising while supply dwindles
SoCal home prices keep rising while supply dwindles
PG&E CEO Patricia K. Poppe, San Diego Gas & Electric CEO Caroline Winn and Southern California Edison CEO Kevin M. Payne. (Getty, PG&E, SDGE, Edison)
PG&E among utilities looking to cut subsidies on solar homes
PG&E among utilities looking to cut subsidies on solar homes
(iStock)
Did pandemic really trigger mass exodus from California?
Did pandemic really trigger mass exodus from California?
(iStock)
Southern California housing rush was unabated in January
Southern California housing rush was unabated in January
Orange County, CA (iStock)
SoCal home sales prices and volume surge
SoCal home sales prices and volume surge
Affirmed Housing CEO James Silverwood and the development site (Affirmed, Google Maps)
Affordable developer proposes complex in Chatsworth
Affordable developer proposes complex in Chatsworth
Homebuyers across Southern California continue to gobble up properties
SoCal homebuying surge bumps up against low inventory
SoCal homebuying surge bumps up against low inventory
Southern California home sales rose 27 percent in July compared to June
SoCal surge: Home sales rose 27% in July
SoCal surge: Home sales rose 27% in July
arrow_forward_ios

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

Loading...