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Tricon partners on $6.4B U.S. single-family rental venture

Tricon Residential Inc. of Toronto is committing $575 million (all figures Cdn unless otherwise n...

IMAGE: Tricon Residential logo.Tricon Residential Inc. of Toronto is committing $575 million (all figures Cdn unless otherwise noted) over three years to a new single-family rental partnership in the U.S. which plans to acquire up to 18,000 resale homes valued at up to $6.4 billion.

The investment brings Tricon’s (TCN-T) current growth commitment to $1.18 billion in equity, which it plans to invest in several partnerships in the U.S. single-family rental sector, as well as a major Canadian multifamily joint venture with CPP investments.

The newest announcement, released Monday morning, will be known as SFR-JV2. This partnership includes the Teacher Retirement System of Texas, Pacific Life Insurance Company and one of Tricon’s existing global investors, which it didn’t identify. It is a follow-on to SFR-JV1, which has acquired over 9,000 homes and is now fully invested.

“We are very excited to partner with three leading investors to launch SFR JV-2, which represents the largest joint venture in Tricon’s history and is a significant milestone for institutional investment in the single-family rental asset class,” said Gary Berman, president and CEO of Tricon Residential, in the announcement.

“Tricon has now raised $2 billion (US) of third-party equity commitments year-to-date and has the capital in place to grow our single-family rental portfolio to nearly 50,000 homes over the next three years.

“We anticipate growing our portfolio by over 6,000 homes in the coming year and are already well on track with more than 1,500 homes acquired in Q2.”

Tricon Residential and its partnerships

Tricon currently owns interests in, and/or operates a portfolio of over 31,000 single-family rental homes and multifamily rental apartments in the U.S. and Canada. The firm’s primary focus is the U.S. Sun Belt.

Tricon will be the asset manager and property manager for assets acquired by the SFR-JV2 joint venture.

The initial equity commitment by the partners is $1.79 billion and could increase to $1.98 billion, including Tricon’s co-investment. Incorporating leverage, this could give the JV $6.4 billion of purchasing power.

The single-family rental homes will be acquired primarily from resale channels, a strategy which complements Tricon’s other investment vehicles targeting new-construction single-family rental homes.

According to the National Rental Home Council, owner-occupied housing in the United States has increased by more than 10 per cent during the past five years, while rental housing stock has only increased by one per cent. In 2020 alone, the rental housing market lost over 275,000 units.

Tricon’s strategy is to address this gap by providing mid-market rental housing within America’s fastest-growing markets.

While this venture focuses on resale properties, Tricon’s other two major ongoing U.S. expansion partnerships – known as the Homebuilder Direct JV and THPAS JV-1 – are focused on new construction homes and developing build-to-rent communities.

Tricon’s committed investments

“With the closing of this joint venture, Tricon is well positioned to accommodate the incredible demand we are seeing across the U.S. Sun Belt for high-quality single-family rental homes at an accessible rental price point,” Berman said in the release.

“We will also be able to enhance the scale and efficiency of our technology-enabled operating platform, allowing us to continue to innovate and deliver superior service to our residents.”

The following table, provided by Tricon, shows the scope of each of the firm’s active single-family rental growth strategies:

Investment Vehicle


Homebuilder Direct JV


Total Equity Commitment

$1.40 billion – $1.55 billion

$300 million – $450 million

$450 million

Tricon’s Share of Equity

$450 million

$100 million – $150 million

$50 million

Total Anticipated
(Including projected
property-level debt)

$4.7 – $5.2 billion

$1.0 billion – $1.5 billion

$1.0 billion

Target # of Homes

17,000 – 19,000

3,500 – 5,000


Target # of Homes per

5,700 – 6,500

1,200 – 1,700


Primary Products /
Acquisition Channel

  • Resale homes
  • Portfolios of existing
  • Scattered new homes
  • Recently completed SFR
    communities (no
    investment in
  • Primarily development of
    SFR communities (build-

In addition, its partnership with CPP Investments targets multifamily rental development in the Greater Toronto Area. Tricon committed up to $150 million to that venture on a 30-70 basis, with CPP Investments providing up to $350 million.

The first project will be a two-tower development proposed to contain 870 units on a 1.8-acre site in Toronto’s downtown east neighbourhood, within walking distance of the Central Business District.

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