Front Yard Residential Corp. announced that it has acquired property manager HavenBrook Partners along with a portfolio of 3,236 properties managed by HavenBrook.
The move expands Front Yard’s single-family rental portfolio to approximately 15,000 units and strengthens the firm’s presence in existing strategic target markets, including Alabama, Florida, Georgia, and Minnesota. In addition, the acquisition of HavenBrook provides Front Yard (NYSE: RESI) with an internal property manager.
The combined purchase price of the properties and the property manager was $485 million.
“The acquisition of HavenBrook and the homes it manages is a milestone in our company’s evolution as the leading affordable housing provider,” said CEO George Ellison in a statement. "The acquisition of an internal property manager will allow us to improve the excellent service to our families while providing opportunities to drive efficiencies to increase shareholder value.”
Front Yard also reached an agreement with Altisource Portfolio Solutions (ASPS) to acquire certain property management resources owned by ASPS for an agreement cost of $18 million.
The company said it intends to combine the resources acquired from ASPS with the HavenBrook platform and to transition approximately 4,000 properties managed by ASPS to the internal property manager by Dec. 31.
Berkadia Commercial Mortgage provided $508.7 million of 10-year, fixed-rate financing as part of a Freddie Mac affordable single-family rental pilot program. The 10-year permanent financing was sized using a 69% loan-to-value ratio and a 30-year amortization schedule, according to Berkadia.
The financing includes 2,798 of the newly acquired homes and 2,015 additional properties owned by Front Yard and previously financed.
Over 78% of the units financed have rents affordable for families earning at or below 80% of the area median income (AMI), with 93% affordable for families earning at or below 100% AMI.
“Though we’ve closed five single-family rental financings with Freddie Mac’s affordable single-family rental pilot program totaling over $100 million to date, this is a significant accomplishment for Berkadia and Freddie Mac,” said managing director Anthony Cinquini of Berkadia’s Los Angeles office.
The transaction will help keep thousands of quality rental homes available in communities across the country, providing an affordable rental option to many families who do not have the means to purchase a home, said David Leopold, vice president of Targeted Affordable Sales and Investments at Freddie Mac Multifamily.
“Front Yard has invested millions of dollars to rehabilitate these homes, bringing them out of disrepair and putting them back to work providing low-income and working families with a quality, affordable place to call home,” he said in a statement.