Brookfield in talks to buy US landlord from Singapore’s GIC in $10bn deal

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Brookfield Asset Management is in talks to acquire a US landlord of manufactured homes from Singaporean sovereign wealth fund GIC for more than $10bn in one of the largest property takeovers since 2022.

The purchase of Yes! Communities would be among the $1tn investment group’s largest deals and signals rising optimism about the health of the US real estate market after a crunch caused by higher financing costs.

The Canadian investment group would be making a large bet on the lower end of the US residential property market, a vote of confidence in the strength of the world’s largest economy as some recent economic data has pointed to a slowdown.

The asset manager has been negotiating the acquisition of Yes! for months and talks are ongoing, according to three people who had been briefed on the matter. While discussions are at an advanced stage, they said no deal had been formally agreed and talks could still fall apart.

Brookfield and GIC declined to comment. Yes! did not respond to messages seeking comment.

Brookfield executives have been touting opportunities in the real estate sector in recent months, pointing to what they perceive as a change in sentiment — and an opening of capital markets — that has boosted acquisition and refinancing activity. Since early last year, the group has spent more than $10bn on homes and apartments, with the majority in the US.

Denver-based Yes! oversees a portfolio of tens of thousands of manufactured homes in around 300 communities across the US, particularly in regions such as the Midwest and Southeast. The homes, which are built in a factory and shipped to their sites, are a key part of supplying affordable housing in the US.

The portfolio could benefit from expected rising rents across the US in coming years as many investors and economists forecast a long-term shortage in housing supply. Homebuilders have slowed building of new homes and apartments owing to higher financing costs, leading to a squeeze on supply, including for affordable housing options.

Bankers and real estate executives expect rising rents will fuel more consolidation as investors take advantage of lower values for portfolios of existing homes, versus the cost to build new properties.

Founded in 2007, Yes! began amassing a large portfolio of manufactured homes across the US as property markets began to wilt during the 2008 financial crisis, buying assets from Berkshire Hathaway-owned Clayton Homes and other investors.

Its homes are generally small, single storey houses that come with a garden. The company rents homes and also offers purchase options for customers, in which they buy their unit over time but lease the land from the company.

Yes!, which was acquired by GIC in 2016, has also been in discussions about a potential initial public offering.

Brookfield owns an enormous stockpile of property assets such as London’s Canary Wharf and large apartment and office towers in Manhattan. It has also been an investor in the lower end of the US residential real estate market and recently sold mobile homes for $1.6bn, locking in large gains that benefited from rising rents in recent years.

The asset manager has used land it has held for decades, a vestige of its days as one of Canada’s largest conglomerates, to develop higher-end residential communities in states such as California.