Colony American Homes (CAH) announced today that it closed a $500 million credit facility with J.P. Morgan that will be used to acquire single-family homes across the U.S.
The facility has a $500 million accordion feature that allows CAH to increase the credit to $1 billion.
The move to ramp up its single family home portfolio follows a Bloomberg report that the private equity real estate group began offering loans to single-family rental property owners in July.
Blackstone, Cerberus and more recently FeatherStone announced similar lending programs for single family home rental investors.
CAH owns and manages over 15,000 homes for rent in Arizona, California, Colorado, Florida, Georgia, Nevada, and Texas. CAH was formed in 2012 by Colony Capital, a leading global real estate investment firm that has approximately $25 billion of assets under management and has acquired approximately $50 billion of real estate since its founding in 1991.
The company intends to originate as much as $2 billion in debt during its first year, with potential to do more, including loans of as much as $100 million.
“The closing of this credit facility is another significant milestone in the growth of our business, and these funds, combined with our existing private equity capital, will allow us to continue to actively acquire homes in our selected markets across the country,” said Justin Chang, Chief Executive Officer of CAH. “The ability to easily expand the credit facility as we grow is also attractive and provides for future growth capability as well.”
According to one source familiar with the group, although it is too soon to say when the issuer will come to market with a deal, the group has “from the start, been interested in securitization.”