One of America’s biggest landlords is teaming up with an insurance company, a global investment company and a Texas pension fund to buy $5 billion of U.S. houses to turn into rentals.
Tricon Residential Inc., a Toronto company that operates one of the largest pools of U.S. rental homes, said it has struck a home-buying pact with the Teacher Retirement System of Texas, Pacific Life Insurance Co. and one of the company’s existing foreign investors, which it declined to name.
The parties will together contribute up to $1.55 billion in cash, which will be combined with debt to give the venture purchasing power of about $5 billion. Tricon, which operates about 25,000 U.S. rental homes as well as several apartment complexes in the U.S. and Canada, said it expects to be able to buy about 18,000 houses through the new venture.
The deal suggests that signs of a slowdown in the red-hot residential real-estate market haven’t diminished the allure of rental homes among big investors, who have become major forces in many of the country’s hottest markets.
“We get 6,000 calls a week for a home and we’ve only got 200 available,” Tricon Chief Executive Gary Berman said in an interview. “We want to take advantage of that demand.”