Haven Realty Capital and institutional investors advised by J.P. Morgan Global Alternatives have formed a joint venture to acquire and develop more than $1 billion in new build-to-rent communities throughout the United States.
The $415 million equity joint venture will provide long-term capital for Haven to continue to execute its business plan in the build-to-rent space, working with homebuilders.
“The for-sale housing market has been significantly hampered by recession fears, inflation and rising interest rates, placing a burden on homebuilders and their ability to add to the housing stock,” Haven Founder and Managing Principal Sudha Reddy said in a statement.
“This partnership will allow us to continue working with U.S. homebuilders, who are becoming increasingly comfortable selling entire communities to operators like Haven to lease to residents who want to live in a home but can’t afford to buy or prefer to rent,” he added.
One of the nation’s leading build-to-rent owner/operators, El Segundo-based Haven currently oversees 35 communities across nine states in various phases of construction representing approximately 3,500 homes and $1.2 billion in project value.
“The joint venture will add to Haven’s existing portfolio that has been aggregated over the last two years,” Reddy said. “We expect to be an active buyer/developer as the market evolves and opportunities become available over the coming months.”
Haven Managing Director and Head of Capital Markets Eric Kim added, “The fundamentals of the single-family rental industry remain solid and J.P. Morgan believes as we do in the strength and viability of the asset class along with our ability to execute. We look forward to working with our partner for many years to come.”
Haven intends to leverage its existing relationships and create new ones with best-in-class national and regional homebuilders throughout the Sunbelt states.
The joint venture will target communities with 50 to 200 homes ranging from 1,500 to 2,500 square feet, primarily with three- and four-bedroom and two- and three-bathroom floorplans including two-car garages.
The joint venture comes at a time when new for-sale housing starts have fallen to a two-year low, according to data released from the Department of Housing and Urban Development.
The number of build-to-rent homes increased 30% from 2019 to 2020, according to the New York Times, which analyzed data from the U.S. Census Bureau, the National Association of Home Builders, Bloomberg, a 2019 American Community Survey, Harvard University Joint Center for Housing Studies and Pew Research.
The number of build-to-rent homes being built will likely double in the next 10 years, according to the paper.
“We’re pleased to able to partner with Haven to continue to provide the attractive, newly-built, larger single-family homes for rent that more and more American families seek,” said Ryan Holgan, executive director of Real Estate Americas at J.P. Morgan Asset Management.
Initial seed investments for the joint venture will include three communities located in Atlanta representing nearly 250 homes, with expected closings in the next 90 days.