Lennar Corp. is betting big on the single-family rental market with its new venture with investment giants Allianz Real Estate and Centerbridge. Called Upward America, the company has a $1.25 billion equity commitment from Allianz and Centerbridge, along with other un-named institutional investors, to acquire single family rental homes in high growth markets across the United States.
Including leverage, the Upward America will be positioned to acquire over $4 billion of new single-family homes and townhomes from Lennar and, potentially, other homebuilders, and rent them to households earning “approximately” the median income in each market. The Upward America Venture plays to Lennar’s vision of becoming an ESG driven homebuilding company, making its homes not only available for sale but also for rent, with a portion of the homes available with a rent to own option. This will provide the opportunity for families and individuals to live in brand-new homes at an attainable price point, all without putting up a down payment. The venture will benefit from access to Lennar’s pipeline of over 300,000 owned and controlled homesites. Kirkland & Ellis LLP acted as legal advisor to Lennar. Simpson Thacher & Bartlett LLP acted as legal advisor to Centerbridge and Ropes & Gray LLP acted as legal advisor to Allianz Real Estate in the deal. The investment is a first for Allianz in single-family rental in the US market as the company looks to get in on strong demand seen in the segment from maturing millennials looking for accommodation with a preference for newly constructed homes and their propensity to rent. The investment forms a diversification play within the U.S. strategy, where Allianz intends to deploy $1.3 billion in the residential markets over the next few years. The transaction demonstrates investors’ increasing demand for SFR assets, a sector which has grown from individual units owned and rented out by small investors, to large investors acquiring significant portfolios, building new units specifically for rent and creating entire communities of SFR properties. In recent months Nuveen Real Estate, one of the world’s largest real estate investment managers, announced that it will invest up to $400 million through Sparrow, a newly launched single-family home rental platform. Invitation Homes announced a $375 million joint venture with Rockpoint to acquire single-family rental homes. And Canada’s Tricon Investment Group, an early investor in the sector, has moved into the build-to-rent space with American Homes 4 Rent. Reported by Real Estate Weekly (March 22, 2021) For complete contact information for all business leaders at Lennar Corp. and the other leading U.S. homebuilders including all corporate and division contacts, consult The National Builders Directory and Online Database.
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