JLL-Sponsored Fund Buys Stake in $1.2 Billion Rental Portfolio

(Bloomberg) -- A real estate investment trust sponsored by Jones Lang LaSalle Inc. is taking a stake in a $1.2 billion portfolio of more than 4,000 rental homes, the latest sign of soaring interest in a hot corner of the U.S. real estate market.

The roughly $560 million investment will give JLL Income Property Trust a 47% interest in the properties, which are located in major markets including Atlanta, Dallas and Phoenix, according to a statement Wednesday. The portfolio was assembled and is managed by home-rental company Amherst Residential.

It’s the first investment in the single-family rental market for the REIT, which also owns apartment complexes, industrial buildings, offices and grocery-anchored retail properties.

“We think there’s going to be continued institutional capital flowing into this sector,” Allan Swaringen, chief executive officer of JLL Income Property Trust, said in an interview. “Getting ahead of capital is always an attractive thing.”

Demand for suburban housing has surged during the Covid-19 pandemic, with Americans who can’t afford down payments looking to rental homes with backyards and extra space. That’s led to rising rents and increased interest by private equity firms and other large investors.

The homes in the portfolio JLL Income Property Trust is investing in are more than 96% leased, according to the statement. The transaction includes $205 million of equity and the assumption of a portion of the financing already in place on the properties.

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