Arrived, the innovative real estate firm supported by Amazon.com Inc. founder Jeff Bezos, is expanding its footprint in the real estate investment sector by launching a new Single Family Residential Fund. This move is part of a broader trend seen among major investment firms, focusing on acquiring or constructing single-family homes for rental purposes. This shift is driven by the rising cost of homeownership in the U.S., which has increasingly turned Americans towards renting.
A New Chapter for Arrived
Arrived’s latest venture represents a significant step forward for the young company, which has already made waves in the real estate world with its fractional investing platform. Launched in 2021, the platform has rapidly drawn nearly 500,000 retail investors, offering the chance to invest in single-family rental properties for as little as $100. The popularity of this model is evident, with over 388 homes valued at more than $122 million being funded to date. The overwhelming demand often leads to properties being fully funded within hours, prompting Arrived to cap investment amounts on several offerings.
Simplifying Investment with the New Fund
The newly announced Single Family Residential Fund by Arrived is designed to streamline investment processes. It allows investors to allocate capital more efficiently, eliminating the need to wait for individual property listings. The fund provides an opportunity for diversification, spreading investments across various properties in multiple real estate markets. Moreover, Arrived is planning to offer quarterly redemption or liquidation options for shares after an initial six-month period.
Strong Performance and Continuing Opportunities
Arrived CEO Ryan Frazier remains bullish about the single-family home market, citing its history of solid investment returns and relative stability compared to public equities. The demand for housing continues to outstrip the supply of new constructions, a trend that has persisted over the past decade. This imbalance reinforces the potential of the single-family rental market.
The third quarter of 2023 saw investors on Arrived’s platform earn about $890,000 in dividend income, showcasing a growth trajectory from the previous quarter. In the past year alone, the platform has paid out over $2.8 million in dividends.
Maintaining Roots in Fractional Investing
While the introduction of the new fund marks a significant development for Arrived, the company maintains its original fractional real estate investment model. Investors can continue to buy shares in individual properties, starting with the same accessible $100 minimum.
Backed by Visionary Investors
Arrived’s pioneering approach to real estate investing has not only disrupted the market but also attracted investments from prominent figures in the technology and investment sectors. The platform’s initial success was bolstered by a seed round featuring investments from Jeff Bezos, Marc Benioff, Spencer Rascoff, and Dara Khosrowshahi. Bezos reaffirmed his confidence in Arrived with a subsequent investment during the company’s Series A round, which raised $25 million in 2022.
Arrived’s expansion into the single-family rental fund space, backed by influential industry figures, marks a significant evolution in the company’s offerings, aligning with the growing demand for accessible real estate investment opportunities.