Invitation Homes eyeing $1B joint venture
Single-family rental giant seeking partner in anticipation of market shift
By: TRD Staff
Invitation Homes CEO Dallas Tanner (Getty, Invitation Homes)
Invitation Homes is floating RSVPs to potential partners for a joint venture as the housing market teeters.
The single-family rental firm is looking for a partner on a $1 billion joint venture, Bloomberg reported. People familiar with the matter told the outlet the landlord is working with Eastdil Secured to find a possible partner.
Invitation Homes is in the early stages of its search for a joint venture partner. The firm, which owns more than 85,000 homes, decided to go the route of external capital due to the challenge of raising equity with a stock price that has faltered 28 percent this year.
The pricey venture is a play to take advantage of a shifting housing market, where price growth is slowing in a way not seen since the onset of the pandemic. Invitation appears to have found the opportunity to jump back into the market after CEO Dallas Tanner said earlier this year the company would slow purchases and await better deals.
Single-family rental firms grew in stature during the pandemic, propped up by sustained demand and a short supply of homes. Built-to-rent homes became the fastest-growing housing sector in the nation and investors celebrated returns as rents swung upwards.
Homebuilders saddled with a stockpile of extra homes have started to approach investors to purchase their inventory, offering discounts for bulk sales. Brokers and investors told the Wall Street Journal builders are offering discounts in the range of 10 to 15 percent from estimated retail value.
Invitation Homes is one of the largest players in the single-family rental space, but the Dallas-based firm, however, has frequently found itself in hot water.
A congressional report accused the company of using extreme and abusive tactics to evict tenants during the CDC’s eviction moratorium, one of four firms accused in the report. The claims came after Sen. Elizabeth Warren publicly condemned the company, saying it and two other firms were “taking advantage of the housing shortage by purchasing large numbers of houses and raising rents for families, all to pad their bottom line.”
The company was accused of skipping permits and facilitating poor repair work for its properties, the Washington Post reported in July. A 2020 lawsuit previously alleged work done in California without permits; Invitation Homes called the allegations in the whistleblower suit “unfounded.”