Two Harbors (TWO) plans to launch a new real estate investment trust for acquiring single-family rental properties.
The Maryland REIT focuses on investments in mortgage bonds and has planned to issue a private-label mortgage-backed security since the end of last year. It is now working on an initial public offering for Silver Bay Realty Trust Corp.
Silver Bay will use the capital to buy, renovate, lease and manage single-family homes. Two Harbors would receive shares of common stock in the new REIT to be based in Maryland as well.
PRCM Real Estate Advisers, a joint venture between a Pine River Capital Management affiliate and Provident Real Estate Advisors, will manage Silver Bay externally.
Two Harbors made heavy investments on single-family rentals during the second quarter. It held a portfolio of $120 million in rental homes at the end of July, up from $6.1 million just three months prior.
“We are excited about the proposed Silver Bay transaction,” said Two Harbors CEO Thomas Siering. “We believe Two Harbors shareholders would benefit from the creation of a stand-alone, pure-play single-family residential property REIT. The current investment opportunity for single-family rental properties remains attractive and the proposed transaction would add additional scale and diversification to our existing portfolio.”