Top Single-Family Rental REITs See Further Growth Despite Headwinds

A solid year. Another great year. Another record-breaking year. That’s how the top three REITs in the single-family rental industry—Invitation Homes, American Homes 4 Rent and Tricon Residential—have described their respective business results for 2022. By all accounts, all three public REITs expect continued success in 2023, but they also anticipate slower growth as they pull back on acquisitions and build-to-rent developments.

Invitation Homes continues to lead the SFR industry with a portfolio of just over 83,000 rental homes in markets primarily in the Western U.S., Florida, and the Southeast as of the close of 2022. With holdings of nearly 59,000 single-family residences, American Homes has a footprint in 21 states. The third of the “big three,” Toronto-based Tricon Residential Inc., boasted a growing SFR portfolio totaling 36,000 residences located predominantly in the Sun Belt at year’s end.

For Invitation, American Homes, and Tricon, the last quarter of 2022 yielded year-over-year improvements in operating results pretty much across the board. Growth in total revenue. Check. Increased core net operating income. Check. Growth in core funds from operations. Check and check. All three companies also recorded portfolio occupancy levels of 97 percent or more and all three have decided to take a more modest approach to new acquisitions in 2023.

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Following $601 million in SFR purchases in fiscal year 2022, Invitation Homes is planning a maximum of $300 million in acquisitions in 2023, gauging its activity by changing market conditions as the year progresses.

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