The commercial real estate and investment firm, which is a leader in the office leasing and management space, has created an agreement with rental property management company and investment platform Roofstock, which stands to give the Oakland-based fintech startup significant stature in the rental home investment market.
Through the new agreement, Roofstock is purchasing a real estate asset-management platform targeted toward small investors called “Stessa” from JLL. JLL, meanwhile, is contributing an undisclosed amount of cash for a minority stake in Roofstock. The two companies have also established a commercial agreement through which Roofstock will help JLL clients worldwide that are interested in owning multiple rental homes.
“It gives us credibility with a lot of their customers who are looking to invest in U.S. housing,” Roofstock Chief Executive Gary Beasley told the Journal. “They can dial in a strategy and our team will build those portfolios for them and manage the properties.”
Rental properties became a popular avenue for investment after the foreclosure crisis of 2008-2010 made millions of U.S. homes become available at exceedingly low prices, and simultaneously created a large population of renters. Meanwhile, technological advancements over the years have facilitated the growth of remote landlording, opening up the opportunity for investors further.
During the current pandemic and economic recession, some landlords and renters have butted heads over eviction moratoria, but overall, rent payments have been quite resilient. The pandemic has also opened up an opportunity for investors with suburban properties, as increased demand for rentals in these areas amid work-from-home policies has led to rising rents.
All that helps explain JLL’s interest in the market right now, and its effort to help facilitate investment in it among the company’s existing clients.
“The single-family rental asset class is seeing strong demand from our investor clients — both private and increasingly institutional — and this investment will position our teams to offer unique insights and access to opportunities in this space,” Richard Bloxam, CEO of Capital Markets of JLL, said in a statement.
“We are excited by Roofstock’s scalable, data-driven platform servicing both retail and enterprise [single-family rental] clients as well as the deeply accomplished and experienced team,” Co-CEO of JLL Technologies Yishai Lerner said in a statement. “We see a strategic investment coupled with a commercial partnership as the best approach to offer state-of-the-art services to our investors seeking [single-family rental] exposure.”
Another inherent advantage of the partnership is the ability of JLL to now offer investors the opportunity to quickly adopt assets at scale that help them distribute risk in different geographical areas across different rental properties. The companies hope the agreement will yield more international buyers investing in U.S. rental properties and that Roofstock will ultimately open up rental homes in JLL’s markets abroad.
The asset-management platform Stessa that Roofstock acquired helps small-scale mom-and-pop landlords track and assess their investment’s performance through tools like automated income and expense tracking and visual dashboards with detailed reports. It has more than 170,000 properties on the platform representing over $45 billion in assets.
As investors seek to get the economy back on track, JLL has been favored in the markets — the company’s shares have surged 95 percent since September.