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Tuesday, Jun 6, 2023

American Homes Forms Distressed-Asset Venture

Single-family landlord American Homes 4 Rent has established a joint venture to acquire distressed U.S. mortgage assets. The Agoura Hills real estate investment trust partnered with Johnson Capital Residential Investments LLC, a unit of real estate capital advisory firm Johnson Capital in Irvine, to form American Mortgage Investment Partners LLC. “We anticipate that this joint venture, focused on the future acquisition and resolution of residential mortgages, will help facilitate our continued growth,” said American Homes Chief Operating Officer Jack Corrigan in a prepared statement released late Tuesday. American Homes was co-founded by B. Wayne Hughes, the billionaire founder of Public Storage Inc. in Glendale. The REIT is the second largest owner of single family homes in the United States, with 19,825 properties as of July 31. American Homes went public July 31 in an IPO that raised $706 million. Underwriters have since exercised rights to acquire additional shares and the company expects gross proceeds of $887 million before underwriters’ discounts and offering costs. However, the company – like others in the industry that has rapidly emerged since the housing bust – has struggled to turn a profit as rental payments have failed to keep up with acquisition and other costs. In its first earnings report since going public, the company reported a net loss of $14 million (-15 cents a share) in the quarter ended June 30, despite revenue rising to $18.1 million from $182,000 a year earlier. American Homes, which had 684 employees, according to a July regulatory filing, laid off 15 percent of its workforce in August, according to a Bloomberg News report. Shares gained 2 cents, or a fraction of a percent, to close at $15.95 on the New York Stock Exchange.

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