REIT all about it: Issue 1234 - In this week‘s "REIT all about it...."

Research evidence excerpt

REIT all about it: Issue 1234 - In this week‘s "REIT all about it...."

U.S. Single Family Rental REITs - Get The Show On the ROAD

Compromise version of the bill allows for BTR with no max holding period Real Estate

Overall, the agreed upon revised version of the 21st Century ROAD to Housing Act by The Senate

Banking & House Financial Services Committees provides a clarified path forward for institutional

landlords. For the SFR REITs, key provisions in this version are grandfathered institutional portfolios with

institutional buyers permitted to buy from other institutions and a carve out to allow for institutional

buyers to purchase homes from homebuilders (incl. BTR and scatter site) with no maximum holding

period. While the bill still needs to pass the Senate, likely by the end of July, the act has bipartisan

support, and the Trump administration has also indicated support. Assuming the bill is passed, AMH

indicated it believes it's unlikely that a new housing bill will be brought up at the national level near-

term. However, we think that there could still be changes in regulations for institutional owners that

emerge at the state or local level.

How does this impact the SFR REITs?

In our view, there are puts and takes from the ROAD to Housing. As a positive, institutional owners

would continue to be able to grow externally through both acquisitions from homebuilders and

dedicated BTR developments. There is no change to the in-place portfolios of scatter site homes. While

this is a positive from the external growth side, it may be a negative in that any newly acquired

properties will be in newly built communities which are less insulated from supply pressures. Higher

interest rates should keep a lid on BTR development near-term, but we would expect pockets of supply