News: Tricon to Acquire Thousands of SFRs

In this week's Industry News (Week of 19 Jul 2021).

Tricon Announces $5 Billion Joint Venture to Acquire Over 18,000 Single-family Rental Homes | CNW

Tricon Residential Inc., an owner and operator of single-family rental homes and multi-family rental apartments in the United States and Canada, announced that it has entered into a joint venture arrangement with three institutional investors to acquire single-family rental homes targeting the middle-market demographic in the U.S. Sun Belt. The investors participating in this investment vehicle include the Teacher Retirement System of Texas, Pacific Life Insurance Company and one of Tricon's existing global investors.

Institutional investors continue to pile into the U.S. Single-Family Rental (SFR) asset class to take advantage of the compelling supply and demand characteristics bolstering a strong risk-adjusted return profile. While there is certainly a strong case for the asset class in the U.S., Konfidis is proud to be the catalytic service provider for investors in the Canadian market, unlocking the asset class north of the border. Further, Konfidis assesses that certain Canadian markets provide similar, if not more compelling, total return investment prospects than many U.S. markets.

Full press release available here.

Is Canadian Media Cheering for a Housing Market Collapse? | Storeys

You’d be forgiven for thinking the housing market was fundamentally risky, unstable, and poised to collapse — a dangerous bubble waiting for its inevitable bust. Media coverage has breathlessly followed the industry’s record-breaking stats and the unexpected pandemic frenzy, with fairly regular references to an upcoming financial crisis. But according to some experts and industry players, a collapse is far from guaranteed — and headlines are sometimes hysterical.

“They all are feeding from Bloomberg News,” says Murtaza Haider, professor at Ryerson University’s Ted Rogers School of Management, research director at the Urban Analytics Institute and Haider-Moranis Bulletin columnist for The Financial Post. “Bloomberg said, ‘We have run our economic model and we have found that Canada is one of the frothiest markets.’ And they use metrics that make no sense to me. They say the price-to-income ratios have increased significantly. And the question is: Are we buying coffees? Because we pay cash for coffee — so price matters. Are we buying clothes? Because we pay cash for clothes — so price matters. But housing is bought on credit. And credit is the cheapest it has ever been in the last 50, 100 years because the interest rates are so low.”

A looming Canadian housing market crash has been sensationalized in the media for nearly a decade. At Konfidis, we sift through headlines and focus on concrete data, always focusing on long-term supply and demand fundamentals for each market. While "bubble talk" can make for great dinner conversation, the data tells a different story.

Full article available here.

Canadians get creative to tap into hot housing market (Poll) | BNN Bloomberg

As prices in many Canadian housing markets have increased sharply since the start of the pandemic, it should be no surprise that some would-be buyers are looking to buy a new home in unconventional manners, a new poll found. One in three Canadians homebuyers said they are considering so-called “workarounds” in order to buy a home, according to a new Leger poll commissioned by real estate brokerage Re/Max. That includes renting out a portion of their primary residence, pooling finances with friends or family to come up with sufficient funds, or even living in a shared space with neighbours.

Home ownership is becoming increasingly unaffordable as home price appreciation outpaces wage inflation and certain high credit-quality families don’t qualify for traditional mortgage financing offerings. While rental homes are a great solution for many families, single-family rental options are dominated by mom-and-pop landlords with no institutional-quality and professionally managed alternatives available to Canadian families. Konfidis and its partners are proud to provide a professional rental solution to prospective tenants and are aligned with tenants as it seeks to establish a brand and reputation of trust with Canadian families and communities.

Full article and video available here.

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Konfidis is pleased to share our weekly real estate investing industry news piece herein. We love connecting with our members. Reach out with your questions to hello@konfidis.com.

Shael Soberano, CFA Konfidis Inc. Chief Investment Officer

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