BIG INVESTORS SINKING CASH INTO HOUSING MARKET.

Firms snapping up houses, flipping them to rent

In 2019, Lennar Homes of Texas finished construction of Escondido North, a subdivision of 334 one- and twostory homes packed onto thin lots in one of the few remaining wedges of undeveloped land within Loop 1604 in Converse.

By the end of the year, all the Northeast Side homes had been sold — and it’s easy to see why.

With listings in the high $100,000s, the subdivision offered a rare window of affordability in a market where high demand and a tight supply of homes for sale had driven prices to record highs, outside the reach of many middle-class families.

Yet more than 1 in 8 of the homes in Escondido North were not sold to families or individual owners. Thirty-five were purchased by Tricon Residential, a publicly traded company based in Toronto, Canada, which paid for them with cash, property records show. Three homes were purchased by an affiliate of Man Group, a global investment firm headquartered in London — again, with cash. Another four went to Amherst Residential, of Austin. American Homes 4 Rent, a real estate investment trust from Calabasas, Calif., bought three more.

Each of the companies then marketed the homes as rentals, and they are now available with monthly rents in the $1,600 range.

Though companies such as Tricon and Amherst are not well-known in San Antonio, they are major players in the local housing market. They and other investors — ranging from individual owners to Silicon Valley home-flipping companies such as OpenDoor — currently account for 23 percent of home purchases in San Antonio, according to a report published in March by John Burns Real Estate Consulting.

The companies are well-financed, often raising investment dollars from sovereign wealth funds, pension funds and insurance companies seeking high yields in an era of low interest rates, said Rick Palacios, the director of research at John Burns. Tricon, for example, announced May 5 that it was entering a $1.5 billion joint venture with Pacific Life Insurance Co. to buy newly built singlefamily homes in the Sun Belt.

The companies commonly use their own algorithms to identify homes to purchase based on factors such as location, age and price point, Palacios said. Many of them are focusing on San Antonio and other Texas cities because of the state’s relatively low home prices and fast-growing population, he said.

While their presence in San Antonio is a show of faith in the local economy, it does not bode well for the average homebuyer when the supply of available

Billy Calzada / Staff photographer Out-of-town real estate investment firms have acquired multiple properties on the same block on this street, Forest Canyon.