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Pretium signs $600M joint venture to develop rental home

(Bloomberg) — Pretium Partners is launching a joint venture that will invest nearly $600 million to develop new homes for lease, expanding into a corner of American housing that’s increasingly popular with investors. .

Pretium, whose portfolio of 70,000 homes makes it the second largest single-family homeowner in the US, is partnering with Indianapolis-based builder Onyx + East to develop more than 2,000 rental homes. The deal follows another joint venture, announced in September, for the firm to build 3,000 homes through a partnership with builder Crescent Communities.

Homes built exclusively for rent have emerged as an important part of Wall Street’s love affair with housing. The model allows investors to invest large amounts of capital in a single transaction and projects can be easier to acquire and maintain than a portfolio of old, scattered homes.

Investors have pledged billions of dollars for projects as the Covid-19 pandemic kicks off the race to acquire suburban housing. Pretium’s closest competitors include Invitation Homes Inc. Builder of Pultegroup Inc. and American Homes is the in-house building operation of 4 Rent.

Pretium’s new venture will build three- and four-bedroom homes in Ohio, Indiana and the west coast of Florida, targeting sites with easy access to job hubs, retail centers and good schools. According to a statement, the projects will include the same design elements as the Onyx+ former homes for sale included in the communities.

While Pretium continues to buy homes through other channels, it sees build-to-rent as a significant part of its business, said Matt Johnston, managing director of the New York-based firm.

“We really want to be the leader in build-to-rent and make an impact in solving the huge housing need in America,” Johnston said. “The need for housing is huge.”

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