Silver Bay first announced the transaction in February, calling the deal a “transformational milestone” for the real estate investment trust.
The deal is now complete, with the final purchase price and total number of properties coming in slightly less than the original estimate.
Originally, the deal was expected to be for approximately 2,460 rental homes for $263 million. The finalized deal sees Silver Bay acquiring 2,373 properties from The American Home for $252.2 million in cash.
Silver Bay also said that it has an additional 89 properties under contract with the American Home and plans to acquire those at subsequent closings, which would bring the total acquisition to 2,462 rental homes.
According to Silver Bay, the homes are primarily located in Atlanta, Charlotte, Tampa and Orlando.
“We view this transaction as another transformational milestone for Silver Bay. The American Home Portfolio consists of high-quality, strategically located single-family rental homes with over 90% occupancy that is highly complementary to our business,” David Miller, the president and CEO of Silver Bay, said in February.
“The transaction will significantly expand Silver Bay’s presence in Atlanta, Tampa, Charlotte, and Orlando – key growth markets that exhibit strong economics and long-term rental demand,” Miller added. “This acquisition will accelerate Silver Bay’s growth strategy, leverage our operating platform and allow us to capture scale efficiencies leading to increased cash flow for our stockholders.”
According to Silver Bay, the American Home portfolio offers several “compelling financial and strategic benefits,” including:
- Leased portion of the portfolio exceeds 90% with average existing rents of approximately $960 per month; the purchase price per square foot of the portfolio is approximately $66
- Increases scale in Silver Bay’s growth markets by acquiring a complementary stabilized portfolio with significant geographic overlap to the company’s existing portfolio. Approximately two-thirds of The American Home portfolio is located in Atlanta, which is one of Silver Bay’s largest markets