Creative Thinking Opens Up New Horizons for SFR Deals Across Asset Classes

Single-family rental (SFR) continues to grow as an institutional real estate asset class in America, and the SFR-focused securitization market has developed alongside, driven in part by Dechert’s pioneering role.

Global finance partner Kenneth Hackman described how Dechert has tackled supporting clients with their SFR lending and securitization platforms.

“2022 was a challenging year in the real estate and capital markets, but we were able to develop creative solutions for our clients to meet their business needs in a changing economic environment by drawing from our experience in both commercial and residential real estate legal structures. As the SFR market has grown over the past decade, we have helped lenders and borrowers to push boundaries and create new templates for the market,” said Hackman. “Our global finance team has been at the forefront of transforming SFR finance into a robust, viable, institutional asset class.”

In 2022, Dechert acted as issuer’s counsel on 14 SFR securitizations and underwriter’s counsel on four SFR securitizations, including securitizations for two first-time issuers: the nearest challenger acted on just three (source: Asset-Backed Alert). Prior to that, the firm has been a leader in this SFR securitization market, including acting as issuer’s counsel on a US$2.49 billion securitization backed by over 14,000 single-family residential properties, the largest-ever deal in the SFR space at the time of completion.

“Over the past decade, we have seen SFR transform from a nascent industry into a mature asset class,” explained Hackman. "We helped our clients demonstrate that it’s possible—and economic—to own, operate, finance and securitize SFR properties at an institutional scale, and we have helped develop one of the newest and most robust CMBS asset classes.”

Both Hackman and the firm have been recognized for their SFR work. Hackman was named to Law360’s Rising Stars list and he was honored as a 2022 Rising Star by Private Debt Investor. According to Asset-Backed Alert, a weekly update on worldwide securitizations, Dechert was named the #1 Top Issuer Counsel for Single-Family Rentals for 2022. The firm previously ranked as top issuer’s counsel for SFR in 2021, a record year for SFR securitizations, acting on 17 deals valued at US$10.5 billion, including nine of the 10 largest.