B2R Finance, which finances purchases of single-family rental properties, has launched the industry’s first multi-borrower securitization.
The transaction is expected to consist of $230 million in aggregate principal balance pass-through certificates rated by at least two rating agencies and backed by 144 mortgage loans secured by single-family residential properties, two- to-four-unit properties, condominium properties, townhomes, multifamily properties and mixed-use properties.
The subordinate classes will be acquired by an affiliate of B2R Finance.
“B2R is pioneering the first securitization of residential investor mortgages in the U.S. to grow its platform, increase the amount of capital available to our clients and enable us to continue our leadership position in growing the asset class,” said Jason Hogg, CEO, B2R Finance.
The transaction is expected to close in April 2015.
It marks a shift in an industry that sprung up only a few years ago as large investors snapped up thousands of repossessed properties, turning in them into rentals. As housing prices have risen, these institutions have slowed their own purchases and started lending to smaller landlords.
To date, all of the securitizations in the sector have been backed by a single loan that is backed in turn by thousands of properties owned by the sponsor. But multi-borrower deals have been anticipated for months. At the ABS Vegas conference in February, Ryan Stark, a managing director at Deutsche Bank, predicted that there will be $10 billion to $12 billion of rental securitizations this year, at least $1 billion of them multi-borrower deals.
B2R was established by funds managed by Blackstone Tactical Opportunities to provide residential buy-to-rent mortgages for property investors, focused exclusively on the financing and growth capital needs of single-family home investors and entrepreneurs.