SFR Operator Transcendent Electra Rebrands as ARK With $3B Pipeline Planned
By Andrew Coen January 26, 2023 12:04 pm
reprints
After founding single-family rental (SFR) operator platform Transcendent Electra in 2021, Jordan Kavana is looking to expand further into the growing property sector with a new name.
The Miami-based SFR operator announced Wednesday it is rebranding as ARK Homes for Rent with a goal of acquiring and developing roughly $3 billion in new SFR properties over the next five years in the Sun Belt, Commercial Observer can first report. Kavana has already closed $2 billion in SFR transactions since establishing the firm two years ago as a joint venture between Transcendent Investment Management and multifamily owner Electra America.
“We are really building a tenant-focused brand here so that was the impetus behind the rebranding,” Kavana told CO. “We have two unique angles in that we’re the only firm in the space that traffics in newly built SFR. Secondly, we have the tenant focus as probably the most important focus, insofar as how we’re going to take care of them holistically.”
Kavana has been on the front lines of the SFR space since 2008 when he created Transcendent Investment Management with a focus on acquiring and developing SFR and build-to-rent communities throughout the Sun Belt. After forming the JV with Electra in 2021, he sought to ramp up his firm through partnerships with the multifamily owner’s subsidiary, American Landmark Apartments. Electra America is a division of Electra Group, the largest publicly traded real estate organization on the Tel Aviv Stock Exchange.
After expansion in 2021 and 2022, Kavana is eyeing more modest growth this year of 3,000 to 5,000 SFR units to account for the volatile debt markets. While much of ARK’s expansion the last two years under the Transcendent Electra name was driven through equity, Kavana is looking to align with lenders later this year who can further support the scaling of ARK’s business.
“In this somewhat unpredictable credit cycle that we’re in, for the right deals we’re very comfortable taking significant equity exposure,” Kavana said. “But it’s really important to have the right debt lined up.”
In addition to zeroing in on transactions, Kavana is also open to acquiring other platforms that could provide synergy and enhance ARK’s existing offerings. To ramp up ARK’s expansion efforts, he is looking to hire 55 new employees for the firm’s Miami office. Kavana is also looking to enhance the company’s technology with a new CRS system along with upgrading its automated valuation and modeling system.
As SFR moves more into the forefront of CRE investing, Kavana recalls a time back in 2008 when many naysayers doubted his vision.
“I’m an entrepreneur at heart and I like breaking things. Frankly, I noticed that single-family was a mom-and-pop asset class and I felt like there was just so much disruption to be had, both in terms of technology processes and capital markets,” he said. “Everybody that I would talk to about my thesis of investing in single-family housing said it didn’t make any sense, that it wasn’t scalable and I was a schmuck. So when I hear those things I get really excited, because there’s got to be something there when everyone says there isn’t.”
Andrew Coen can be reached at acoen@commercialobserver.com.
