The pandemic has prompted more renters to seek out additional space, but owning a single-family home may not be attainable. As such, single-family rentals have become a growing business—one that is attracting homebuilders.
Lennar, one of the nation’s largest homebuilders, announced it was creating the Upward America Venture, a platform that will acquire single-family homes to rent in high-growth markets across the country. It hopes to use that venture to acquire more than $4 billion of new single-family homes and townhomes from its own portfolio and from those of other builders.
“The Upward America Venture continues Lennar’s vision of becoming an [environmental, social, and governance]-driven homebuilding company by making our high-quality homes not only available for sale but also for rent, with a portion of homes available with a rent-to-own option,” says Rick Beckwitt, co-CEO and co-president of Lennar. “The vehicle’s social focus provides a unique opportunity for families and individuals across the country to live in brand-new homes at an attainable price point, all without putting up a down payment.”
Breckwitt added that he believes the venture has an opportunity to scale “at a pace we do not believe possible for competitors in the single-family rental space, given its direct access to Lennar’s pipeline of over 300,000 owned and controlled home sites.”
The single-family rental sector will likely continue to perform strongly in the market, notes William Rahm, senior managing director and global head of real estate at Centerbridge. The Upwards America Venture is being capitalized with an initial equity commitment of $1.25 billion led by venture partner Centerbridge Partners. Other investors in the platform include Allianz Real Estate and other institutional investors who are helping to fund the venture.
Source: Lennar Corp.
