Rising interest rates prompt single-family rental investment trust to postpone IPO pricing

Colony American Homes Inc., which buys single-family homes in mid- and upscale neighborhoods and rents them out, has postponed the pricing of its initial public offering due to lower expectations resulting from rising interest rates, the Wall Street Journal’s MarketWatch reported.

The Scottsdale, Ariz.-based company is part of a new class of real estate investment trusts (REITs) focused on buying single-family homes rather than large commercial properties. Some such REITs that went public recently, including American Residential Properties Inc. and Silver Bay Realty Trust Corp., have experienced a sell-off in the last two weeks and their share prices have dropped, MarketWatch said.

As of April 30, Colony American owned at least partial shares in 9,931 homes in nine states. The firm had planned to raise up to $260 million with its IPO, according to Reuters.

American Homes 4 Rent, another single-family REIT, is looking to raise $1.25 billion in an IPO filed this week.

Source: MarketWatch