GI Partners said June 5 that it agreed to sell its Waypoint portfolio of 3,106 single family rental properties to Colony Starwood Homes for about $815 million. The deal is expected to close in third quarter. GI invested in Waypoint Real Estate Group, which renovates, leases, and manages SFR assets in select markets across the United States, in 2011.
GI Partners sells its Waypoint Portfolio to Colony Starwood
SAN FRANCISCO, June 5, 2017 – GI Partners (“GI”) announced today that it has signed a definitive agreement to sell a portfolio of 3,106 single family rental (“SFR”) properties to Colony Starwood Homes (NYSE:SFR) for approximately $815 million. The transaction is expected to close in the third quarter of 2017, subject to the satisfaction of various closing conditions.
GI was one of the earliest institutional investors in the SFR space through its 2011 investment in Waypoint Real Estate Group (“WREG”), a platform that renovates, leases, and manages SFR assets in select markets across the United States. WREG generates value by utilizing its proprietary technology platform to selectively acquire and manage homes at scale, allowing it to assemble SFR portfolios that provide attractive current rental revenue and have the potential to appreciate in value over time. Since inception, WREG has focused on acquiring SFR assets in select infill markets that have meaningful inventories of attractively priced homes combined with demographic qualities that support lease rates, stable tenancy, and long term appreciation.
Since making its initial investment in 2011, GI has worked closely with WREG management on numerous strategic value creation initiatives enabling the platform to support greater scale and successfully expand into new markets beyond Northern California, including Southern California, Phoenix, Atlanta, Chicago, and South and Central Florida. In 2013, WREG merged with an affiliate of Starwood Capital Group to manage its portfolio of SFR assets, which were later merged with Colony American Homes in 2016 to create Colony Starwood Homes.
Hoon Cho, Managing Director at GI Partners, said, “We are very pleased with the success of both WREG and our SFR portfolio and believe this transaction will deliver significant value to Colony Starwood Homes and its shareholders. As an early institutional investor in the SFR industry, we are gratified in playing a role in turning a cottage industry into a permanent asset class within the $30 trillion U.S. housing market.”
“We are proud of WREG’s performance since our investment, during which time the company grew into a national player, increasing its portfolio with quality home purchases and diversifying into new and attractive geographic markets,” said Richard Magnuson, Executive Managing Director at GI Partners. “This investment is representative of our differentiated strategies that deliver value for our investors. It has been a pleasure to partner with WREG and Colony Starwood Homes, where our value creation efforts helped lead to this successful outcome.”
Doug Brien, Co-Founder of WREG, said, “We are very pleased with our decision to team up with GI Partners in 2011. Our partnership allowed us to build a great company that was one of the early pioneers in the SFR space, enabling us to assemble the high quality portfolio being sold in this transaction. This sale culminates a very rewarding journey for everyone on the GI/WREG team and all of our investors.”
Paul Hastings acted as exclusive legal advisor to GI during the transaction.