FirstKey Homes Receives $ 2.1 Billion Loan For Over 9,000 Single Family Homes – Commercial Observer



The single-family rental market accelerated last year amid the pandemic as rising house prices forced many to abandon their rent.

Investors poured into space and home rental construction skyrocketed in 2020 to meet the demanddespite the unstable economic situation that has created problems with the supply chain.

Commercial Mortgage Backed Securities (CMBS) single-family homes surpassed the broader CMBS market last year in terms of delinquencies, and now it looks like the space is poised to welcome larger single-family funding with open arms. As early as this year, 11 CMBS single-family lease deals worth more than $ 6.7 billion are either closed or close to completion, according to the research firm. Trepp

The securitization of single-family leases, which began to gain traction in the early 2010s, have characteristics of both CMBS and Mortgage Backed Securities (RMBS) transactions. Not so long ago – in 2014 – Kroll Bond Rating Agency (KBRA) developed a methodology for rating the securitization of single-family leasesjust a year after the first securitization of single-family leases entered the market in 2013.

In one of the latest CMBS projects this year, according to the presale released last week, Cerberus Capital Managementsingle family investment and management branch FirstKey Homes according to an analysis of the transaction conducted by KBRA, provided just under $ 2.1 billion in debt to CMBS to collect 9,238 rental homes. The deal, which will be the third securitization of FirstKey’s single-family lease, is due to close on July 15, according to Trepp and KBRA information.

Morgan Stanley is the lender who granted and sold a five-year fixed rate mortgage loan with the first collateral under the KBRA. The loan is secured by FirstKey simple interest on each of the houses in the portfolio.

The portfolio includes homes in 16 states, with Atlanta, Miami and Charlotte accounting for over 31 percent of the portfolio; Florida, Georgia and North Carolina are also the states with the largest portfolio participation (56.5 percent). ), force analysis KBRA.

FirstKey acquired and accumulated homes between April 2015 and February 2021, with more than half of purchases, according to KBRA, in 2018. Most complete homes have three or more bedrooms and two or more bathrooms, and each averages around 1,755 square feet.

Despite the pandemic, the recession-resistant reputation for single-family rentals has largely survived for the portfolio. Almost 93 percent of the rent was collected in May, and about 96 percent was collected in April; and 90-day rental fees, which include fees that were received within three months of their first billing, ranged from 94.4% to 98% from April 2020 to March 2021, according to KBRA.

As of this month, the portfolio has 158 vacant homes and only 418 properties, accounting for just 4.3 percent of the portfolio, tenants of homes that were found to be one month overdue on rent and 158 vacant homes in the portfolio.


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