reAlpha Asset Management Inc. and SAIML Pte. Limited Agree to Form $200 Million Joint Venture to Acquire Short-term Rental Properties
DUBLIN, Ohio–reAlpha, an AI-powered real estate technology and investment company with a goal to empower everyone with the ability to invest in the $1.2 trillion global short-term rental (STR) market, today announced an agreement to form a joint venture between its property company, reAlpha Asset Management Inc., and SAIML Pte. Limited, a Singapore-based asset management firm, to invest $40.8 million of equity in rent-ready STR properties. With leverage, the joint venture expects to make up to $200 million of investments across California, Arizona, Florida and Tennessee.
“We are excited to partner with SAIML to advance our growth strategy”
Per the terms of the term sheet, a SAIML nominee will join the board of reAlpha, subject to approval of the Board of Directors of reAlpha and any required shareholder approval by reAlpha’s stockholders.
“We are excited to partner with SAIML to advance our growth strategy,” said Giri Devanur, CEO of reAlpha. “SAIML is a sophisticated investor who understands the power of our differentiated platform and shares our strong conviction for the STR asset class. This partnership, together with our recently secured $200 million financing facility from Churchill Real Estate, demonstrates the quality of the opportunities we have sourced and will fuel our investment activity in the year ahead.”
The joint venture will leverage reAlpha’s proprietary AI-driven algorithm, reAlphaBRAIN™, to identify vacation homes that meet its strict investment criteria. This technology is capable of quickly scanning large quantities of property and market data to identify which assets have the potential to deliver a return on investment that is higher than the industry standard. reAlpha Asset Management Inc. will have a 51% stake in the joint venture and oversee its day-to-day operations, and will earn customary fees associated with property and asset management.
“In meeting reAlpha and learning about its platform, creative approach to marketing and mission to democratize real estate investments in a better, cheaper and financially inclusive manner, we became convinced the company’s value proposition is a game changer,” said Bala Swaminathan, Founder and CEO of SAIML. “We strongly believe that reAlpha has the opportunity to become a global leader in the vacation rental space, and look forward to contributing to its growth.”
Through its technology, reAlpha Asset Management Inc. will work to quickly build a pipeline of STR properties to support the joint venture’s investment activity. Further, the company’s in-house brokerage is expected to drive time and cost efficiencies tied to the acquisition and disposition of assets. Upon mutual agreement, reAlpha Asset Management Inc. and SAIML can expand their partnership by contributing an additional $61.2 million of equity to the joint venture. This, together with additional debt financing, will enable the joint venture to invest up to $500 million in STR properties.
reAlpha is building a digital real estate investing platform that enables its members to simplify wealth creation opportunities through investments in vacation homes while striving to deliver exceptional guest experiences. reAlpha sources and scores properties from the wholesale market using a proprietary AI-driven algorithm called reAlphaBRAIN. It then predicts the viability of each property for the short-term rental market, as well as the projected long-term value. reAlpha’s business plan contemplates eventually allowing investors to buy equity in specific properties, providing opportunities for short-term passive income generation via Airbnb, as well as equity-driven capital appreciation. reAlpha is based in Dublin, Ohio. For more information, please visit www.realpha.com.