Partners Group to buy U.S. rental homes for over $1 billion

Partners Group Holding AG has agreed to buy more than 2,000 rental houses owned by Fortress Investment Group, according to people with knowledge of the matter — the latest bet on U.S. residential real estate by an alternative asset manager.

The transaction values the portfolio at more than $1 billion, said one of the people, all of whom requested anonymity because the deal is not yet public. Included are more than 2,000 new-build homes operated by Kairos Living and about 1,000 homes in contract. They are primarily located in the U.S. Sun Belt, and cities such as Oklahoma City; Amarillo, Texas; Birmingham, Alabama; Tampa, Florida; and Atlanta. 

Representatives for Baar-Zug, Switzerland-based Partners Group and Fortress declined to comment. Kairos representatives didn’t respond to a request for comment.

Single-family rentals became a favored property type during the pandemic, as families sought bigger living spaces to ride out the work-from-home era. Firms such as KKR & Co. and Brookfield Asset Management Inc. made new investments, while others, including Man Group Plc, added to existing bets.

A U.S. housing shortage, meanwhile, has helped landlords like Invitation Homes Inc. and American Homes 4 Rent achieve record occupancy rates and rapidly increase rents. That’s given some investors confidence to keep acquiring rental houses as interest rates rise.

Chicago-based Kairos was established in 2019 and has acquired homes for funds managed by Fortress, according to ratings information for a 2021 securitization.

Partners Group has $18 billion under management in private real estate and targets sectors that have “transformative growth themes,” its website shows.