Thursday, May 21, 2020

"As millennials flee coronavirus-ridden cities, JP Morgan teams up with American Homes 4 Rent to build large suburban rental homes"

As noted in the intro to May 4's BlackRock: "5 ways the world could change: An investor watchlist":
....There are actionable points made rather than something that looks like compliance stripped the life out of the commentary. One example, and it is just an example, in this piece is point 2 below. If you get the urban/rural question right, and get your bets down you won't have to make too many other macro decisions for the rest of your life..

Think John Templeton going into Japan at 2-3 times earnings and riding that market 40-fold.
Catching the big trends makes the rest of this stuff a bit easier. 
And the headliner from CNBC, May 14:
  • American Homes 4 Rent, a California-based, single-family rental REIT, recently closed on a deal to build 34 homes in Sovana and Spring Valley, the former on the outskirts of Las Vegas and the latter a close-in suburb. They will be larger homes, 12 three-bedroom units and 22 four-bedrooms.
In its first joint venture with JP Morgan Asset Management, one of the nation’s largest single-family landlords is building its own rental homes near Las Vegas, NV, banking on a new millennial push to the suburbs--a push now accelerating due to the coronavirus.

American Homes 4 Rent, a California-based, single-family rental REIT, recently closed on a deal to build 34 homes in Sovana and Spring Valley, the former on the outskirts of Las Vegas and the latter a close-in suburb. They will be larger homes, 12 three-bedroom units and 22 four-bedrooms.

The deal is clearly an effort to capitalize on a new desire among city-dwellers to find additional space in pristine, new homes outside the dense downtowns besieged by the deadly coronavirus outbreak.
“We see this shift as particularly prevalent among the millennial generation, the largest U.S. age cohort, who are looking to transition away from apartment living,” said Mike Kelly, Head of Real Estate Americas at J.P. Morgan Asset Management. “The move towards more spread-out living is also expected to accelerate in the wake of the COVID-19 pandemic, and we anticipate strong occupancy and rental growth rates across properties.”

The first home deliveries are expected this June and completion is anticipated by October 2020. And that’s just the beginning. The two are looking to spend $625 million to develop approximately 2,500 single-family rentals across multiple markets in the West and Southeast.

As of March 31, 2020, American Homes 4 Rent owned 52,776 single-family properties in 22 states. J.P. Morgan owns a similar number of multifamily units on behalf of institutional investors throughout the United States, according to the release....
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