Carrington Holding Co. announced an agreement with certain investment funds managed by Oaktree Capital Management to fund the purchase of up to $450 million in distressed single family homes on a national basis.
Carrington will manage these homes as rental properties to meet market demand for rental units. This forms part of the industry’s effort to take out distressed properties from the sales inventory to stabilize the U.S. housing market.
Carrington, which currently manages more than 3,000 single family rental homes under Fannie Mae’s Tenant-in-Place and Deed-for-Lease programs, was the first company to rent out REO (lender-owned) properties. The GSE has developed a national field services network along with a proprietary software system that enables centralized property monitoring and management.
“We believe that re-deploying vacant REO properties into rental homes is a way to help revitalize the housing market,” noted Carrington Founder and CEO Bruce Rose. “Reducing the number of distressed properties for sale can help stabilize home prices and putting families into currently-vacant homes can begin the healing process for neighborhoods that have been damaged by foreclosures.”
“Carrington’s REO rental program is an excellent fit for our investment strategy, which includes a broad range of debt and equity investments in real estate-related investments and restructurings.” said John Brady, Oaktree’s head of global real estate. “We believe that this is not only a unique investment opportunity with few qualified large-scale competitors, but one that also has the potential to have a broader positive effect on the housing market and the overall economy.”