Tricon Expands into Texas

Tricon Capital Group expects to get some high rental returns from its most recent acquisition.
Wissam Francis,Tricon

Wissam Francis,Tricon

Tricon Capital Group Inc. has acquired a portfolio of 1,385 homes located in North Carolina, South Carolina and Texas from BLT Homes, a single-family rental operating platform of Building and Land Technology, for $150 million.

“The portfolio we purchased was exactly identical to the current areas that we are in,” Wissam Francis, Tricon’s executive vice president, corporate finance, told Commercial Property Executive. “Our existing portfolio already includes properties in Houston and San Antonio, and Columbus (N.C.) is only about an hour and a half away from our Charlotte portfolio, so it seemed like a natural fit for us.”

According to Francis, the portfolio allowed Tricon to expand into Texas in a meaningful scale.

“We’re very selective on where we go and what areas we go into,” he said. “We focus on areas we are already in and focus on those we have been in for some time now. We’ve been looking at and studying the Texas market for a couple of years now.”

BLT Homes originally entered the single-family rental business in 2012, acquiring homes at unprecedented discounts to replacement cost to operate a rental portfolio at attractive relative yields.

“We’re extremely pleased to complete this transaction with one of the top operators in the single-family rental sector and a competitor in our markets for whom we have a great deal of respect,” Christopher Capolongo, BLT Homes’s CEO, said in a company release. “We have created significant value since our initial single-family acquisitions, and we believe this transaction will produce a successful result for both parties.”

RealtyTrac’s Q1 2015 Residential Property Rental Report noted that with homeownership rates at their lowest level in 20 years and relatively low home prices in many parts of the country, there is still plenty of opportunity in the U.S. housing market for single-family rental investors employing a variety of investing strategies.

“Whether focusing on markets where homeownership-shy Millennials are migrating, markets where recovering Gen X homeowners-turned-renters are prevalent, or markets Baby Boomers are testing for retirement, investors can find good options with solid potential rental returns,” Daren Blomquist, RealtyTrac’s vice president, said in the report.

RealtyTrac found markets in North Carolina and Georgia offered some of the highest rental returns with Midland, Texas up 24 percent and Asheville, N.C., up 19 percent.