Large corporates are snapping up distressed homes in the thousands nationwide. In some targeted markets where there are more than one of these institutional investors competing each other, first-time buyers are being squeezed out. However, at the same time, they help lift those weaker housing markets on the road to recovery. “Even though housing is the biggest sector in the U.S. economy, there are very few ways for institutional or individual investors to play it,” said Andy Richard, managing director in the Real Estate investment banking group at Credit Suisse. “So when you talk about all the institutional money that’s flowing into the space, No. 1 is that people want exposure to the asset class because prices have bottomed. And from a portfolio point of view, housing has cycles and hot buttons that are different from other sectors, so there’s a lot of interest on the part of investors.” Private equity firms and banks started adding single-family homes to their portfolios five years ago at the very peak of the real estate collapse. They became even more aggressive when Fannie … Continue reading
