C-Star has exited its Fund I, which aggregated a portfolio of single-family rental homes in the Atlanta metro area, to an institutional single-family rental operator, almost doubling the purchasing price.
Fund I sold at an in-place cap rate of below 4 percent, C-Star CEO Sherry Li said. C-Star received multiple cash offers from key players in the SFR space and sold at 10 percent over its asking price to an institutional investor that currently owns 40,000 homes across the United States. The deal closed in 35 days at a 35.4 percent gross IRR (27.1 percent net IRR), at a 10 percent portfolio premium on top of market price.
Investors in Fund I, which fully deployed in June 2019, included high-net-worth individuals, family offices and small- to mid-sized institutional sources of capital. C-Star’s acquisition criteria for homes target middle-income, entry-level properties, with rental rates falling between $1,500 and $2,500. The fund’s average tenant profile tends to ha