US single-family rental housing operators Starwood Waypoint Residential Trust and Colony American Homes are to merge in a stock-for-stock transaction.
The combined company would own and manage more than 30,000 homes and have an aggregate asset value of $7.7bn (£5bn).
Share allocations were allocated based on each company’s net asset value, with SWAY shareholders owning 41% of the company’s shares, and former CAH shareholders 59%.
The transaction is expected to close in the first quarter 2016 and is still subject to the approval of SWAY shareholders and closing conditions.
Thomas J Barrack Jr, chairman of Colony Capital, said: “We believe this merger demonstrates the power of scale and consolidation and really crystallises the long-term durability of the single-family rental industry. This combination of CAH and SWAY truly redefines this asset class, and the opportunity in front of us is immense.”
Colony American Homes operated 19,000 single-family rental residential homes in the US at the end of June, one of the largest portfolios of single-family homes in the US.
Starwood Waypoint Residential Trust managed 12,500 single-family rental homes in eight US states at the end of June.
Barry Sternlicht, chief executive of Starwood Capital Group, said: “This merger is a transformative event for SWAY and for our industry. Combining two best-in-class teams, with a superior portfolio of homes in carefully selected geographic markets, positions us to deliver long-term capital appreciation for our shareholders while earning compelling current yields at or above those currently achievable in other major real estate asset classes.”
