J.P. Morgan Asset Management has closed on its first joint venture project with American Homes 4 Rent (NYSE: AMH), a leader in the single-family home rental industry. The project, which officially closed at the end of April, will feature 34 single-family homes in the Sovana and Spring Valley areas of Las Vegas, Nevada, comprising 12 three-bedroom homes and 22 four-bedroom homes. The first home deliveries are expected this June and completion is anticipated by October 2020.
J.P. Morgan Asset Management, on behalf of institutional investors, and American Homes 4 Rent are seeking to deploy $625 million of equity and develop approximately 2,500 purpose built single-family rental homes across multiple high-growth markets in the West and Southeast. As of March 31, 2020, American Homes 4 Rent owned 52,776 single-family properties in selected submarkets in 22 states. J.P. Morgan owns a similar number of multifamily units on behalf of institutional investors throughout the United States.
“This partnership provides us with the opportunity to capitalize on an increasing trend amongst city dwellers to seek additional space and the appeal of high-quality suburban living in a newly constructed community,” said Mike Kelly, Head of Real Estate Americas at J.P. Morgan Asset Management.
“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. 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,” continued Kelly.
“We are proud to be partnering with J.P. Morgan Asset Management and value the institutional endorsement of our industry-leading built-for-rental development program,” said Christopher Lau, Chief Financial Officer at American Homes 4 Rent. “Coupled with our innovative mobile technology platform that enables prospective residents to tour homes without an agent and manage their rental experience online, we believe that our built-for-rental development program has the potential to revolutionize the single-family rental industry. This really is a case of the right strategy, at the right time, with the right partner.”
By year-end 2020, the venture has plans to deliver additional high-quality, single-family rental projects in American Homes 4 Rent’s existing markets in the West and Southeast.
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