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Reven Housing REIT, now for sale, is a rare small-cap single-family rental owner

Reven Housing REIT Inc., a tiny single-family rental owner that is now exploring a company sale, has survived for years in a consolidating property sector, even as its small-cap peers have been swallowed by larger competitors.

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Reven's Chairman and CEO, Chad Carpenter, said in a news release that the market has not acknowledged the company's efforts to add size and value to its 989-home platform, which is focused in Texas, Oklahoma and the U.S. Southeast.

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Carpenter launched the company in 2012, when a host of investors were buying rental houses at steep discounts in the wake of the global financial crisis. In 2013, Reven raised $25 million in capital from Allied Fortune (HK) Management Ltd, a fund manager based in the British Virgin Islands. Allied's stake, representing approximately 54% of the company, is now valued at about $21.6 million, according to S&P Global Market Intelligence data.

Carpenter and his fellow company executives, along with people associated with Allied, are among Reven's other major shareholders, which also include board member Zhen Luo, of Shanghai Huazhou Real Estate Development, and board member Rick Imperiale, of Uniplan Cos.

According to a June 2018 investor presentation, Reven's properties on average are smaller, with lower rents but higher gross rental yields than those of their public single-family rental peers. The company's houses are also older, with an average age of 50 years as of Dec. 31, 2018, compared to 15.3 years for American Homes 4 Rent and 35 years for Front Yard Residential Corp.

Blackstone Group LP and Starwood Capital Group Global LP recently moved to trim their investments in Invitation Homes Inc., but a number of other large private investors are reported to be pursuing properties in the space, including Heitman LLC, Cerberus Capital Management LP, Amherst Holdings LLC and Pretium Partners LLC.

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