Thursday, July 29, 2021

New Real Estate Investors in Pittsburgh?

Recently I took a deep dive into Allegheny County real estate data. I had developed a hypothesis that there were some new investors working in local real estate markets, especially the market for single-family homes (SFHs). There is growing evidence of larger institutional investors making expanded real estate plays nationally.  See this WSJ article from April: If You Sell a House These Days, the Buyer Might Be a Pension Fund.  

But at least this Slate article explicitly calls us out Pittsburgh saying these new investors are “ignoring cities with stable or shrinking populations, like Providence and Pittsburgh.”   Historically I’m pretty sure it has been true that national money has not been a big player in local residential housing markets just because the prospects for appreciation was so bad here for long time. But has that been changing is one big question,

To see if that was true, I built a dataset of property owners from the online Allegheny County property assessment database. This was done with a python script and I multitasked my real estate bot to do some scraping. 

Allegheny County has on the order of 550 thousand individual real estate parcels. I started by filtering out just those parcels with their most recent transfer coming in either 2020 or 2021.  Deed records can often make into county electronic records with a short delay, so at this time, this dataset covers most transactions through the end of June 2021, or about 18 months starting just before Covid set in. This came up with a total of around 48 thousand parcels, which seems like a lot of transactions. There are not that many regular real estate sales each year, but a transfer may or may not reflect an arms-length market transaction. Many are, but all sorts of other property transfers can also show up—things like transfers between family members or other corporate/legal machinations.

I then grouped the ownership of these parcels, i.e., the parcels that show a transfer in the last year and a half. Below is the ranked list of the largest current holders (largest by the number of parcels, not value or anything else) among these recently transferred parcels.

Largest holders (in number of parcels) of Allegheny County real estate of property with a transaction since January 1, 2020. 



Total Value



**(see below)






























**(see below)

























* * Includes owners listed as SFR3 LLC and SFR3-000 LLC

July 30 update: Two corrections/clarifications.  One is that the firms named SFR3 in various forms might be different firms so adding them together here might not be correct. But even if they are different firms, they appear to be out of state investors.

** also note the entries for Clairton Community Properties and  PITT LOKI were originally listed with total valuations of $31million and  $51 million respectively which were incorrect. For PITT LOKI a transfer of 41 parcels was for a total value of $1.2 million. This value shows up in each parcel record and was incorrectly added up multiple times. Similarly the total valuation of the portfolio transfer for Clairton Community Partners was too higher.  In this list, multi-property sales do not seem to be significantly impacting other entries.

You see some large portfolios showing low total valuations but this can be explained. These are recorded transfer values, not assessed or market values. Lots of legal machinations generate nominal values in transfers, often $1/parcel per transfer. But let’s look at the five owners of Allegheny County real estate who are holding 100 or more parcels that have had an ownership transfer recorded over the last year and a half:

1)     The largest group of properties are owned by Clairton Community Partners LLC. This appears to be an artifact of a bankruptcy of a local real estate company. The transfer of a large portfolio is showing up. It does not appear to me to be any form of net new buying in the region. (Ref: So interesting, but not what I am looking for right now. 

2)     #2 is NVR, but that is the parent company of Ryan Homes, which has long one of the major home builders in the region, so it makes sense that they have a lot of real estate activity. I suspect they would have shown up high on lists like this for the last half-century at least. So again, nothing unusual.

But then there the next three owners, each of which have acquired a lot more parcels than many other major real estate players in town, and even some of the major public organizations. 

3)     #3 is VB One LLC . This is one of the largest acquirers of properties in the county over the last year, yet the Google machine tells me very little about who they are. They own at least 151 local properties acquired since the beginning of 2020, yet just don’t seem to have a presence like large real estate or rental businesses in town.  Am I missing something? The only thing I see via some references online is that it might be a foreign investment vehicle (see: But add it up, and they have recently purchased around $10 million in local property within the county. 

4)    #4  is SFR3 which would appear to be this organization:   For the purpose here I’ve combined owners identified as SFR3 LLC and SFR3-000 LLC. That website lists a number of states they operate in not including Pennsylvania, but they have clearly arrived.  The website says they are in the business of “Affordable Housing for America’s Workers Thousands of workforce homes across the South & Midwest.” That’s so innocuous as to make me curious.  Total investment over last year and a half looks like it adds up 133 parcels valued at around $10 million as well. What is interesting is they are buying a wide range of parcels. Everything from this in Lawrenceville, to this in Upper St. Clair

5)  Finally, number 5 is Segavepo LLC, which again is a company that has almost no info popping up for me on the internet. I count 107 parcels, and they seem to be pricier than what SFR3 or—adding up to just under ~$15 million in total transaction value.  The only things I see on the internet are again a few terse legal filings ( which say this might another foreign investment vehicle. 

Is there anything this either illegal or improper in some investors building big portfolios in the county? Absolutely not.  But the presence of some new real estate investors, especially non-local investors could be having a big impact in local real estate markets. Outside investors are certainly not new, but I’m more familiar with outside investors purchasing either commercial or multi-unit property in the region. Where there have been large portfolios of single-family real estate here, I've always thought they were mostly local investors, many who accumulated properties over decades when values were so low here. To have national or foreign investors buying significant portfolios of single-family real estate locally, I think is a new phenomenon. That there are several of these investors currently very active is something.

Taken together, these three investors look like they have purchased over 400 parcels valued at $35 million in transaction values, most of it just in the last year. In the big scheme of things, just a small rounding error in the value of all county real estate, but at the margin and if focused in the single-family markets if you think of this as all net new real estate investment, it could be having an impact.  

Then the question is whether this has been going on for a long time of if this is new. Without looking back to find similar investors in the past, let's just look at these three investors. The current holdings of these three investors have transfer dates only going back to September 2019. I can't say for sure they have been purchasing properties for longer and have since sold properties previously-purchased, but they appear to be buying and holding for now. So it appears their activity is all very recent, all within the last two years at least for these three investors and their activity appears to have accelerated in the last six months. This is also consistent with the legal filings referenced above which all show dates in the last 18-24 months. 

The next question is what are they doing with the properties. Are they planning on holding on to these parcels and if so for how long. It looks like they are mostly renting these properties out, which in itself could have a significant shift of many submarkets away from owner-occupied into rental units. These investors could also be responsible in part for the rise of cash offers for many properties that I’ve at least heard anecdotally has surged over the last year.

After the top five holders, rest of the list drops off pretty quickly in terms of how big the holders are in terms of recent transactions. Most make sense to be there and include a lot of public or nonprofit organizations operating in this space.  Some are private investors, but they are either folks who have been developing real estate in the region for decades (Maronda Homes for example) or are just not on the same scale as the three entities highlighted above. A few might be smaller versions of thee national investors. We'll come back at some point to look at what properties the Turnpike Commission has been buying over the last year?

Note this is all just Allegheny County data, but some internet searching suggests to me all three entities are active elsewhere in Pennsylvania. It’s possible this activity is having a more concentrated impact in counties which have a higher proportion of single-family homes. Overall, the size of these portfolios are big enough that they are worth watching, but might not be noticed yet because they are not concentrated in any particular neighborhood or municipality. I don't see any big pattern in where these purchases are within the county, they look to be across almost all areas of the county which may explain why they have not been noticed as yet. The question going forward is this just the leading edge of more national/international investors coming into the market here, or something else? 


I had not seen this at all when I started this, but it turns out the Milwaukee Journal Sentinel did a series of reports all published on April 15th of this year on the impact of new out of state real estate investors there and remarkably they pretty much uncovered some of the same firms and the same patterns that are showing up here. They also uncovered some of the back story on the firms that are clearly impacting them and us. I'd definitely read their stories: 

I also wanted a clearer picture of when this started locally and the trends over time. Here is what I get looking at the timing of the purchases by just these three firrms:  SFR3 (which may or may not be more than one firm), VB ONE and Segavepo.  I don't see anything before September 2019, and the total number of parcels acquired has been highest since December of 2020. So definitely a very recent phenomenon something to watch going forward, especially as has been pointed out to me if this eviction ban goes away, the risk of buying rental properties may come down and give these types of firms greater incentive to continue these purchases. If they keep up this pace, or accelerate just moderately and keep it up, each of these will soon become among the larger rental players (especially in the single family home market) in the county. 

ADDENDUM August 2,2021

Here is a little more parsing of where within Allegheny County these three firms. This table breaks down the top municipalities or city of Pittsburgh wards with the largest number of parcels owned by one of these three firms as of the end of July 2021. 

There are a large number spread across all county municipalities. In fact I think over 90 of 128 municipalities in the county now have a least one parcel purchased recently by these three forms, but there are some municipalities that have much larger numbers.  Looks like the near eastern suburbs of Allegheny County is one nexus of these purchases, so Penn Hills, Monroeville and a little further down the list North Versailles, Plum, Wilkins and Forest Hills all on this list of top areas.  This list of top 15 areas (by municipality or municipality/ward) make up 60% of all properties. The remainder are spread out across much of the remainder of the county.

ADDENDUM August 28,2021

So I thought it might be important to see if there were other large owners of single family homes in the county. There are clearly some larger owners of apartment units in the county and especially within the city of Pittsburgh, but they almost exclusively have portfolios of multi-unit buildings.  But maybe this phenomenon of large holders of single family homes was not all that unusual and these REITs identified above were just new investors. 

So looking just at Allegheny County real estate parcels that the county assessment data describs as single family residential parcels, I added up who the largest holders were (largest by number of parcels) at the end of August. Given the delay in deed transactions being recorded, this probably reflects a reality more toward the end of July. 

The largest holder of single family parcels in the county was the City of Pittsburgh, which is not all that surprising.  But after the city, the largest private holders of single family housing were these firms that really had no presence here a year and a half ago.  VB ONE LLC and SEGAVEPO LLC are today the largest private owners of . Note I didn't combine any of the legal names in this list, and you will see VB TWO LLC, which I am presuming is an affiliated entitiy, listed there separately along with the various legal forms of SFR3. So again, these REITS have gone from having minimal or no presence within Allegheny County just a year and a half ago to being the largest owners of single family housing here and I suspect they are only accumulating more.

 Here is my list of the 30 largest owners of single family homes in Allgheny County as of August 2021. For each owner I also have calculated the average length of time each owner has owned its current portfolio. That in itself says a lot.