InvestmentsMortgageReal Estate

Altisource Residential struggles with shift to single-family rentals

Doubles portfolio but posts net loss in 3rd quarter

Just a few months ago, Altisource Residential celebrated the fact that it was about to double the size of its portfolio of single-family rental homes, a move that marked a significant step in the company’s transition from a buyer of non-performing loans to an operator of rental homes.

The deal, announced in late September, would bring 4,262 single-family rental properties into Altisource Residential’s portfolio for an aggregate purchase price of $652.3 million.

That transaction fell right in line with the company’s stated plans to shift its business. The company announced last year that it planned to grow its portfolio of single-family rental homes by 900% – from 2,516 to more than 25,000 – over the next few years.

But Altisource Residential’s move to single-family rentals isn’t without its stumbling blocks along the way, as the company announced Monday that it posted a net loss of $57.6 million, or $1.06 per diluted share, in the third quarter.

That brings the company’s net loss for the first nine months of 2016 to $166.8 million, or $3.05 per diluted share, compared to net income of $20.2 million, or $0.35 per diluted share, in the same time period last year.

The company noted in its earnings release that many of its metrics for the success of its single-family rental business are improving, including the increase of its SFR portfolio by 115% in the third quarter.

According to Altisource Residential, its SFR portfolio is now 8,541 properties.

Additionally, Altisource Residential stated that its stabilized rentals grew by 140% to 7,466 properties with 95% leased during the third quarter. Also, the company noted that its rental revenue increased 12% over the second quarter to $9.6 million, bringing its year-to-date rental revenue to $24.2 million.

Altisource Residential also noted that it reduced its non-rental REO portfolio by 16% and its NPL portfolio by 9% since June 30.

“Residential continues to deliver on its stated goals. In the third quarter, we completed a transformative acquisition that doubled the size of our single-family rental portfolio and diversified our property management infrastructure, while continuing to improve our operating metrics,” said the company’s CEO, George Ellison.

“The successful acquisition of a large portfolio of highly stabilized single-family rental properties in our target markets was a significant accomplishment for Residential,” Ellison continued. “We continue to execute on our objectives and make strong progress on our strategy of building long-term stockholder value through the creation of a large portfolio of rental homes that we target operating at a best-in-class yield.”

Most Popular Articles

Housing inventory crisis continues in 2022

Want to know where housing demand is headed? Look at the MBA purchase application data from the second week of January to the first week of May.

Jan 12, 2022 By

Latest Articles

loanDepot’s CEO picks up pricey real estate in Florida

Anthony Hsieh, the CEO of loanDepot, has been buying some pricey real estate in Florida, pushing his property portfolio to over $150 million.

Jan 18, 2022 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please