Starwood Merges with Colony, Rents Continue to Rise

Starwood Waypoint Residential Trust agreed to merge with Colony American Homes, in a transaction that prices Colony at approximately $1.5 billion. Both boards approved the deal that is expected to close in the first quarter of 2016. The deal shows that both companies are planning long-term for the single-family rental industry. Starwood and Colony own over 30,000 homes together, valued at nearly $8 billion. 

Starwood is not the only company acquiring after the housing market crash. Blackstone Group LP spent almost $19 billion acquiring and adding value to about 50,000 foreclosed homes, which are now rented through Invitation Homes LP. Gauging from Starwood and Colony’s merger, home ownership in America will remain low while many prefer to rent. Since the housing crisis, Americans have been pushed out of the home buying market due to tougher lending standards. With homeownership at its lowest levels in 50 years, Americans can expect rents to continue to rise.

Rents are steadily climbing across the country, but increases are not expected to last in places with weak wage growth. Although single family rental homes are doing well, many question how long the trend will last. However, companies like Starwood and Colony are profiting from the trend, as the two project as much as $50 million in cost reductions resulting from the merger.

Click here for the full article from The Wall Street Journal, or click here for more Front Street news... 

 

Comment /Source

Virginia MacKoul

Virginia is a graduate from the University of Florida's College of Design Construction and Planning with a degree in Sustainability and the Built Environment, and a minor in Urban Regional Planning. Virginia joined the Front Street team in 2011, as an intern. Upon graduation, Virginia joined the Front Street team full-time as the Director of Client Services. Ms. MacKoul’s addition furthers Front Street’s continued growth and expansion within Gainesville and other North Central Florida markets. She was promoted to Director of Marketing in 2014 and now manages the firm’s team of interns and oversees all marketing and branding activity. Virginia was born in Boston and moved to Lee County, Florida in 1997. Virginia graduated her high school's International Baccalaureate program and started at the University of Florida with a focus on Architecture. Virginia shares Front Street's passion of giving back to the community and those in need. Virginia's hobbies include photography, cooking, football, movies, music, and spending time with her dog, Brinkley.

 Subscribe in a reader

Subscribe to Front Street's News Page by Email