(Bloomberg)—Barry Sternlicht’s Starwood Capital Group, one of the largest owners of U.S. apartments, is exploring new investments in single-family rental homes, according to people familiar with the matter.
The firm has bought houses through third-party platforms Roofstock Inc. and Tiber Capital Group, said the people, who asked not to be named because the matter is private. Starwood has purchased hundreds of homes, testing the viability of a larger investment, one of the people said.
Representatives for Starwood and Roofstock declined to comment. Tiber Capital didn’t respond to request for comment.
Sternlicht is returning to the single-family rental market after being an early investor in those properties after the U.S. foreclosure crisis. Starwood Property Trust Inc., a real estate investment trust managed by an affiliate of Starwood Capital, bought thousands of rental homes, then spun off a separate REIT. That company was eventually swallowed up by Invitation Homes Inc., the rental giant that still counts Sternlicht as a board member.
These days, foreclosures are rare, and institutional landlords are competing with house hunters to buy homes. Meanwhile, a shortage of starter homes and rising student debt loads have made it harder for young families to buy, allowing landlords to increase rents.
While the initial Wall Street landlords built property-management companies to lease homes and make repairs, there are indications that the new wave of institutional investors will rely on third parties to manage their investments. Roofstock and others, in a bid to win the business, are combining services for acquiring homes with property management.
--With assistance from Gillian Tan.
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