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» VISIT US ONLINE @ DSNEWS.COM 21 Phelan Hallinan Diamond & Jones, PC – New Jersey Our Motto: Dignity & Respect. It is how we treat everyone: co-workers, courts, colleagues, adversaries, clients and our client's customers. We do not take for granted our 30 years of experience in representing lenders in default resolution but pride ourselves on being current, relevant and involved in our unique judicial states issues; seeking to give the best ethical legal representation while partnering to make practical business decisions. The result: Your assets made whole – your reputation: solid. Mary Ann Decker Director of Client Services Phelan Hallinan Diamond & Jones Representing Lenders in PA NJ FL & GA (856) 813-5500 ext. 47398 maryann.decker@phelanhallinan.com For more information please contact: SINGLE-FAMILY RENTAL MARKET EXPERIENCING SHIFT TOWARD SOUTH AND MIDWEST CoStar reported that single-family rental (SFR) property acquisition is geographically shifting as home prices stabilize and credit conditions ease. Institutional investors have also become more selective in which properties to buy and are more focused on managing their properties, collecting rents, and improving operations. Morgan Stanley analyzed a growing trend among institutional SFR operators that are moving away from quickly recovering western markets and heading toward the South and Midwest. Although still at the low end of its projec- tions, the firm believes that this geographical change may help increase mortgage-backed security (MBS) issuance volume. Morgan Stanley analysts also noted that this type of shift affects property quality and realized home price appreciation. e SFR market boomed with news of major property acquisition of distressed properties in the early days in places that suffered greatly during the recession. ese places included Phoenix, Las Vegas, and Southern California. "Houses in the West typically were acquired earlier than those in other parts of the country," the Morgan Stanley analyst reported. "Because of that, those purchases have realized more of the post-recession appreciation. And because home values fell so far in those areas, the magnitude of the recovery in western metropolitan statistical areas was also typically greater." With the market moving toward the South and Midwest, operating costs are likely to rise, CoStar reported. is will likely happen because institutional buyers are focusing on South and Midwest deals and if operators continue to report spending more on rehabilitation costs as a percent of total cost on properties in the South and Midwest than they do on houses in the West. is could also mean lower-quality properties and/or older homes in these regions, which could lead to higher ongoing expenses. Over the past two years, the SFR mortgage- backed securities market for single family rentals has grown rapidly, the CoStar reported. Institutional owners have brought 18 of these transactions to a total market value of $9.8 billion. However, CoStar notes that portfolio growth has slowed across the eight SFR institutional investors that issue mortgage-backed securities. Nomura estimated that the number of single- family homes owned by these firms increased by 44 percent in 2014 but grew by only 6 percent during the first quarter of 2015. "Looking ahead, Nomura now expects the pace of issuing mortgage-backed securities to slow considerably through the remainder of the year as the institutional investors move from focusing on acquisitions to improving management of their existing portfolios," CoStar reported. "Assuming that the firms continue to slow their rate of growth and that 40 percent of the total portfolio is funded through mortgage- backed securities, Nomura estimates that the market may see an additional $2.6 billion in issuance through year-end."

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