Amherst Seeks More Than $1 Billion for Rental Houses

(Bloomberg) -- Amherst Holdings LLC is seeking to raise more than $1 billion to buy single-family rental homes as institutional investors show renewed interest in the young asset class, people with knowledge of the company’s plans said.

Amherst, led by Chief Executive Officer Sean Dobson, already operates more than 20,000 rental houses through its property management subsidiary, Main Street Renewal. The new fund has a term of more than 10 years, giving Amherst flexibility to manage its rentals for the long haul, one of the people said.

A spokesman for Amherst said the company had recently closed on the initial part of a new single-family rental fund, raising $600 million, but declined to comment further.

Large investors started acquiring single-family rental homes following the U.S. housing crisis, when institutions including Blackstone Group LP and Tom Barrack’s Colony Capital Inc. assembled portfolios through foreclosure sales. Wall Street’s acquisitiveness cooled as the supply of distressed properties ran out. Institutional demand is picking up again as aging millennials trade apartments for rental abodes to house their young families.

Other investors riding the wave include Pretium Partners LLC, which closed on a $1 billion fund, and Tricon Capital Group Inc., which announced a $750 million joint venture with the Teacher Retirement System of Texas and Singapore’s GIC Pte. Cerberus Capital Management is said to be raising more than $500 million to buy rentals.

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