Female Founded C-Star Exits its First Single Family Rental Fund With Big Success

New York-based female founded Investment firm C-Star has exited its Fund I, which aggregated a portfolio of single-family rental homes, to an institutional Single Family Rental, SFR, operator, almost doubling  the purchasing price.

Fund I sold at an in-place cap rate of sub 4%, C-Star CEO Sherry Li said. C-Star received multiple cash offers from key players in the SFR space and sold at 10% 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% gross IRR (27.1% net IRR), at a 10% 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 targets middle-income, entry-level properties, with rental rates falling between $1,500 and $2,500. The fund’s average tenant profile tends to have an annual income of around $60,000 to $100,000, Li said.

“The stunning success of Fund I is a testament to the burgeoning single-family rental space, and the velocity with which we were able to complete this transaction – after five unique offers for the aggregated portfolio – speaks to the enduring institutional demand for SFR assets in the US market,” said C-Star CEO Sherry Li.