Invitation Homes, Rockpoint Partners Form $1B Venture

Photo by Jean-Philippe Delberghe via Unsplash

Invitation Homes, the nation’s largest owner of single-family rentals, and Boston-based investment firm Rockpoint Partners announced the formation of a joint venture to acquire and renovate single-family rental homes across the U.S., with plans to deploy more than $1 billion, including debt.

The agreement marks Rockpoint’s first substantial investment in the single-family rental market and comes a week after global asset management firm Nuveen announced its own entry into single-family rentals, a segment that has been steadily drawing more institutional interest during the ongoing pandemic.

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The new venture will be funded with a total equity commitment of $375 million, according to Invitation and Rockpoint, $75 million of which will come from Invitation and $300 million that will come from Rockpoint. The firms plan to deploy more than $1 billion to purchase and renovate single-family homes in markets across the U.S., including the Southeast, Florida and Texas, where Invitation already has a portfolio of homes.

Through the new partnership, the firms will look to purchase homes “of similarly high quality” to homes in Invitation’s existing portfolio, the companies said. Invitation will be providing investment, asset management and property management services for the platform.

Invitation Homes President & CEO Dallas Tanner said in prepared remarks that the sector’s fundamentals and the need for quality rental housing in the U.S. are “as strong as they have been” in the company’s history.

An emerging sector

Single-family rental homes account for more than one-third of the country’s 47 million rental units, according to a 2017 report by the Joint Center of Housing Studies of Harvard University. The segment had been gradually attracting institutional investors in recent years, before picking up during the pandemic.

Last December, developer Global City Development and alternative investment firm Leste teamed up on a $2.5 billion housing platform with plans to build 10,000 single-family rental homes across the U.S.

After the coronavirus outbreak hit the U.S. in March, many of the largest single-family rental home owners have raised billions to expand their portfolio of homes. This May, American Homes 4 Rent teamed up with JPMorgan Chase’s asset management arm J.P. Morgan Asset Management to establish a joint venture seeking to build around 2,500 single-family rental homes in markets across the West and Southeast.