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Partners Group to Buy US Rental Homes for Over $1 Billion

May 11, 2022

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Partners Group Holding AG has agreed to buy more than 2,000 rental houses owned by Fortress Investment Group

(Bloomberg)—Partners Group Holding AG has agreed to buy more than 2,000 rental houses owned by Fortress Investment Group, according to people with knowledge of the matter -- the latest bet on US residential real estate by an alternative asset manager.

The transaction values the portfolio at more than $1 billion, said one of the people, all of whom requested anonymity because the deal is not yet public. Included are more than 2,000 new-build homes operated by Kairos Living and about 1,000 homes in contract. They are primarily located in the US Sun Belt, and cities such as Oklahoma City; Amarillo, Texas; Birmingham, Alabama; Tampa, Florida; and Atlanta.

Representatives for Baar-Zug, Switzerland-based Partners Group and Fortress declined to comment. Kairos representatives didn’t respond to a request for comment.

Single-family rentals became a favored property type during the pandemic, as families sought bigger living spaces to ride out the work-from-home era. Firms such as KKR & Co. and Brookfield Asset Management Inc. made new investments, while others, including Man Group Plc, added to existing bets.

A US housing shortage, meanwhile, has helped landlords like Invitation Homes Inc. and American Homes 4 Rent achieve record occupancy rates and rapidly increase rents. That’s given some investors confidence to keep acquiring rental houses as interest rates rise.

Chicago-based Kairos was established in 2019 and has acquired homes for funds managed by Fortress, according to ratings information for a 2021 securitization.

Partners Group has $18 billion under management in private real estate and targets sectors that have “transformative growth themes,” its website shows.

© 2022 Bloomberg L.P.

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