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Toronto, Ontario-Locally-based Tricon Capital Group has plans to invest in existing US middle-market housing stock and affordable rentals this year.
“The US is facing a shortage of, and high demand for, new affordable housing as many developers struggle to deliver single-family entry level homes to these markets,” Jonathan Ellenzweig, senior managing director of Tricon Capital Group tells GlobeSt.com. “We are on-track to acquire approximately 3,000 homes this year alone. We are also focusing on investing in multifamily assets.”
Ellenzweig says Tricon is seeing a significant demand for single family housing from families who do not have the desire to own or cannot afford to purchase a home. These families are seeking more access to the outdoors, stellar school districts and nice neighborhoods.
“Although apartments offer 3-4 bedrooms, they are not as focused on the quality of schools, playgrounds, and backyard space,” says Ellenzweig.
For multifamily housing, the company is targeting properties with an affordable price point, offer generous square footage and have a high volume of demand.
“We target renters who have a household income of $60K-$100K,”says Ellenzweig. “There are still a lot of people who want to rent, especially 25–35 year olds who are in the pre-family formative stage.”
Tricon recently closed on 700 homes in Nashville for $210 million. The Sun Belt is home to about 40% of all US households, and is expected to see 60% of household growth over the next decade.
“We are gravitating towards certain markets because they forecast long-term population growth and there is an availability of affordable housing units to buy,” says Ellenzweig. “Single family demand will continue to be strong in 2020 as not enough new houses are being constructed. There is a lot of opportunity for growth.”