San Antonio Express-News (Sunday)
San Antonio homes away from home
Latest single-family investor is Japanese conglomerate
Yamasa Corp., a conglomerate based in Okayama, Japan, traces its origins to a timber shop and charcoal transporter founded by the Sano family in 1875. Since a new generation took over in 1950, it’s been expanding into a host of industries: in the 1950s, it began operating gas stations; in the 1970s, building slot machines; in the 1980s, leasing aircraft; in the 2010s, solar power.
In 2018, Yamasa embarked on another new venture: buying single-family homes in the U.S. and converting them to rentals. That year, it purchased its first homes in Dallas and Houston. In April, it entered the San Antonio market with the purchase of a four-bedroom, twobath house off of Seguin Road on the far Northeast Side.
Since then, the company has purchased 29 homes in Bexar County, including eight so far in October, county property records show. Yamasas is the latest on the growing list of high-volume investors targeting San Antonio’s booming housing market.
As San Antonians struggle to find affordable homes in an era of short supply and cutthroat demand, 23 percent of home purchases in the market are now made by investors, according to a report published in March by John Burns Real Estate Consulting. They run the gamut from pension and sovereign wealth funds to companies such as Amherst Residential of Austin and American Homes 4 Rent of Calabasas, Calif., which operate in the single-family rental industry, often abbreviated as SFR.
Rick Palacios, director of research at John Burns, calls it “one of the newest shiny objects in the housing ecosystem of investments.”
It’s hard to say how much of the investment is coming from outside the U.S. because nearly all the purchases are made through LLCs and limited partnerships that obscure the identities of those involved. Apart from Yamasa, at least two other major foreign firms have begun investing in the local housing market over the past decade.
One of them is Tricon Residential, a publicly-traded Canadian company that has purchased at least 611 homes here since 2014, including 296 so far this year. The other is AINO San Antonio LLC, an affiliate of Man Group, a global investment firm headquartered in London. It has purchased at least 50 homes in Bexar County since 2015, according to county property records.
Quest for yield
Yamasa didn’t respond to requests for an interview. But the company, like its American counterparts, is likely investing in single-family rentals in search of higher yields in an era of low interest rates, Palacios said. Since the COVID-19 pandemic disrupted the retail, office and hospitality sectors, the singlefamily housing market is increasingly seen as a reliable investment.
“There’s always allocations of this chunk of money will go to stocks, this chunk of money will go to bonds. But in this perpetual world of low rates, and lower and lower … there’s this quest for yield that investors have to chase,” he said.
When investors bought up single-family homes in the wake of the Great Recession, they did so mostly to flip them, said Tyler Blue, a vice president for Green Street, a real estate analytics firm. But in the past decade, companies such as Amherst and American Homes 4 Rent have proven that singlefamily rentals can be a profitable long-term investment for companies that establish a large-scale presence in U.S. cities, which allows them to manage the properties efficiently, he said.
The industry has gained further legitimacy with investments from firms such as Blackstone Group and KKR & Co., he said. In June, Blackstone agreed to buy Home Partners of America — which has purchased more than 300 homes in San Antonio since 2014 — in a $6 billion deal, according to the Wall Street Journal.
Lennar Corp., one of San Antonio’s most prolific homebuilders, announced in March it was forming a venture named Upward America to buy more than $4 billion worth of singlefamily homes to turn into rentals. The venture is a partner
ship with Allianz Real Estate, a subsidiary of German company Allianz Group. Property records show that Upward America has purchased 21 properties in Bexar County since March.
When investing in U.S. real estate, foreign companies typically stick to “gateway markets” they understand well, Blue said. Formerly, those were office and industrial markets. Now that the single-family rental industry has risen to prominence, they might feel more comfortable investing in it, he said.
“Over the last five years, as a lot of these institutional platforms have invested with scale within markets, invested in cost efficiences, invested heavily in technology, they’ve proven out homes as a long-term rental business,” he said. “Now that they understand that singlefamily homes is a viable longterm business model ... foreign capital has followed suit.”
Multigenerational company
Yamasa Corp. is a hard company to Google. It is not to be confused with the company of the same name that manufactures a popular line of soy and teriyaki sauces. The websites for its divisions — slot machines, oil sales and home construction, and solar power — offer little information in English.
An English-language pamphlet on its main website gives a timeline of the company’s growth. Shinichi Sano, who has served as president since 1973, is on the board of directors for Yamasa Co. Ltd., the partnership the company has used to buy homes in Texas. It appears to remain closely held by the Sano family: The pamphlet notes that in 2011 Shinichi Sano adopted an abandoned hunting dog named “Qoo” that serves as the company’s mascot.
Its website also indicates that it aims to more than triple the number of single-family homes it owns in the U.S. by 2025, to 18,000 from 5,004 this year.
It currently owns about 260