New REIT ETF Targets Hot Multifamily, Single-Family Housing Sectors
David Auerbach, a veteran institutional trader focused on real estate investment trusts, is launching a new REIT exchange traded fund (ETF) seeking to capitalize on momentum in the multifamily and single-family rental markets.
Armada ETF Advisors is debuting its new U.S. Home Appreciation REIT ETF (ticker symbol Haus) on Tuesday, Commercial Observer has learned.
Auerbach, who last month left World Equity Group to become managing director of Armada, said the product was launched as a way to give investors a chance to obtain ownership of single-family and apartment assets amid rising demand. He is running the fund with Armada CEO Justin Goldberg, who owns and manages a portfolio of 3,000 apartments on the East Coast.
“There’s a massive supply demand imbalance that’s impacting the United States housing market,” said Auerbach, who prior to working at World Equity Group in 2019 was a REIT trader at Esposito Securities from 2012 to 2018. “We just feel like there is an amazing opportunity that captures all these different segments of residential real estate in one wrapper.”
Auerbach noted that Haus will be the only “active pure play” residential ETF on the market compared with passive funds that take a more conservative approach. The platform will feature investments in multifamily apartments, manufactured housing, single-family rental and senior housing with particular emphasis on areas of the country with strong in-migration trends like the Sun Belt.
The Haus ETF also includes student housing, which Auerbach said will be attractive since there is currently only one other publicly traded REIT in the U.S. that covers that sector, American Campus Communities.
Another differentiator with the ETF is a REIT advisory board Auerbach formed, composed of senior or retired buy-side institutional portfolio managers, sell-side analysts and former CEOs.
Auerbach said the advisory board brings added credibility to the ETF because of its vast expertise with research and investor outreach. He noted that only two other REIT ETFs are run by REIT experts, which are the ALPS Active REIT ETF from GSI Capital Advisors and Fundamental Income‘s Net Lease REIT ETF.
“Our advisory board, when it’s all said and done will be comprised of folks that have well over 100 years of experience just focusing on the REIT industry,” Auerbach said. “The end investor, they may not understand REITs and residential real estate, but they can know that for the management team and the advisory board in place that this is what they live, eat, sleep and breathe 24/7.”
The fund will also follow the lead of a growing number of ETF issuers who are implementing social causes as part of their offerings, like Simplify Asset Management, which launched last October a Simplify Health Care ETF, where some proceeds are dedicated to the Susan G. Komen breast cancer organization.
Auerbach said once Haus reaches a certain level he would like to donate a percentage of fees to housing causes such as Habitat for Humanity and housing groups dedicated to increasing home ownership among minorities or aiding developmentally disabled individuals.
“We’re trying to find a way to connect with all sorts of investors,” Auerbach said. “There is a charitable aspect of giving back to the community that we want to explore.”
Andrew Coen can be reached at email@example.com.