B. Wayne Hughes, the billionaire who founded self-storage real estate investment trust (REIT) Public Storage Inc., led his newest venture, American Homes 4 Rent, into an initial public offering on Wednesday, selling 44.1 million shares and raising $705.9 million. The company is a REIT focused on acquiring, renovating, leasing and operating residential homes. Hughes, who founded the company and serves as chairman, had hoped to raise $794 million, according to Bloomberg Businessweek.
After selling for $16 on Wednesday, shares slipped 2.5 percent to $15.60 in New York trading today, Bloomberg reported.
The Hughes-led REIT is the second-largest company in the U.S. homes-for-rent market, with nearly 18,000 properties. REITs, hedge funds and private-equity funds have aggressively entered the home-rental market, raising more than $17 billion and purchasing more than 100,000 properties since 2011, according to the source.
American Homes 4 Rent owns properties in 41 markets covering 21 states. Hughes experience with Public Storage should make this publicly traded REIT attractive to investors, according to Dave Bragg, an analyst with Green Street Advisors Inc.
Hughes and Kenneth V. Volk Jr. founded Public Storage in 1972. Hughes served as a company trustee from 1980 to 2012, retiring as chief executive officer in November 2002. In 2008, Hughes and two children sold 5.4 million Public Storage shares on the open market for $342 million.
The executive-management team of American Homes 4 Rent also has strong ties to Public Storage, with David P. Singelyn, CEO; John Jack Corrigan, chief operating officer; Peter J. Nelson, chief financial officer; David Goldberg, executive vice president; Marvin M. Lotz, executive vice president; Sara H. Vogt-Lowell, chief legal officer; and Vincent Chan, chief accounting officer, all having worked for either Public Storage or Public Storage Canada.
Based in Glendale, Calif., Public Storage has interests in more than 2,000 self-storage facilities in 38 states with approximately 133 million net rentable square feet. Operating under the Shurgard brand name, the company also has 188 facilities in seven European countries, with approximately 10 million net rentable square feet.
- American Homes 4 Rent: Website
- Bloomberg: American Homes 4 Rent Falls 2.5% After $705.9 Million IPO
- Bloomberg Businessweek: American Homes 4 Rent Tests REIT Market in Biggest Housing IPO