Mixed reports are coming out of the housing market, but Starwood Waypoint Residential Trust co-CEO Gary Beasley says one thing is for certain: first-time buyers are nowhere to be found.
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“There’s a lot of noise out there. It’s one of the things that I think is driving the single-family rental business,” Beasley told FBN’s Maria Bartiromo on Thursday.
Beasley said a lot of the new construction today is geared toward “move-up buyers” rather than renters looking to buy their first homes.
“There’s no first-time buyer for lots of reasons. Financing isn’t available; there’s a lot of student debt,” said Beasley, noting that the homeownership rate has dropped from over 69% in 2004 to less than 65% today.
With Starwood Waypoint Residential Trust, Beasley said he is focusing on single-family residences in a dozen markets around the country. This is Starwood Waypoint’s first quarter as a public Real Estate Investment Trust (REIT); its market capitalization is just north of $1 billion.
“We grew about 74% in our single family business quarter over quarter,” said Beasley. The company is renting out many of the properties.
“We’re growing organically within our markets. We bought about $421 million worth of assets last quarter, so we’re buying accretively, but we’re also starting to see some rent growth and obviously home appreciation,” explained Beasley. “So for our model, it’s obviously a way to capture both current income from the housing we own and also participate as they appreciate in value over time … So it’s really a total return play.”