US: Stockbridge MORE Communities, the owner of single-family communities operating under the Covey Homes brand, has announced a $380 million boost to its existing acquisition warehouse facility.
The addition brings its current warehouse facility capacity to $780 million. Cumulatively, Covey Homes has nearly $1 billion in financing to pursue acquisition opportunities throughout Sun Belt states. With equity commitments and other funding sources, Covey Homes has gross purchasing power of more than $4 billion.
Nomura joined Bank of America and other lenders in funding the acquisition warehouse facility, which will be used by Covey Homes to acquire BTR communities throughout the US Sun Belt.
“This facility expands our opportunity to more rapidly build out our Covey Homes platform,” said Mark Alfieri, CEO of MORE Residential. “Millennials and Baby Boomers are embracing the hassle-free single-family rental experience as they discover that our professionally managed and maintained communities offer prices that are competitive with, and often less than, the all-in costs of owning a home.”
Covey Homes owns and operates more than 2,000 completed homes in 15 communities across the south-east and Texas. The company has approximately 3,000 more homes in development.
“We are accelerating our acquisition activity amid strong demand for high-quality single-family housing in well-maintained communities in desirable locations,” said Alex Lachman, portfolio manager at Stockbridge. “This funding provides Covey Homes with even more firepower to pursue new acquisition opportunities in the fast-growing build-to-rent market.”
Formed in 2021, Stockbridge MORE Communities is a joint venture between San Francisco-based investment firm Stockbridge and Plano, Texas-based MORE Residential, led by the former management team behind Monogram Residential, a publicly traded REIT that was sold in 2017. The venture now brands all of its communities as Covey Homes.
Covey Homes communities generally consist of 50 or more homes with amenities, such as clubhouses, fitness centres and swimming pools.
In 2022, delivery of SFR homes in the US reached a 10-year high, with Texas and the south-east among the hot spots.
