Invitation Homes to form $300m JV with Rockpoint

Invitation Homes to form $300m joint venture with Rockpoint

Invitation Homes has entered into an agreement with Rockpoint Group to form a new joint venture partnership to acquire single-family rental homes in premium locations.

The new joint venture will acquire homes in premium locations and at higher price points relative to the homes currently targeted by the company and its previous venture with Rockpoint, which the two companies announced in October 2020.

“This new JV will enable us to expand our growth opportunities and serve the growing number of renters by choice who place a high premium on location,” said Dallas Tanner, President & CEO of Invitation Homes. “We view this as complementary to our established core investment strategy that remains the focus of our on-balance sheet investment. In addition, we are thrilled to pursue this new JV alongside Rockpoint, with whom we have developed a strong and trusting partnership through our existing joint venture.”

“We’re excited to continue our partnership with Invitation Homes,” said Tom Gilbane, a Managing Member at Rockpoint. “They are best-in-class operators, and together we are focused on creating high-quality attainable housing to meet the growing demand for single-family rentals. We feel this unique strategy is complementary to our long-term focus on creating housing that serves our customers and betters our communities.”

The JV will be capitalized with a total equity commitment of $300 million, of which $50 million (16.7%) will be committed by Invitation Homes and $250 million (83.3%) will be committed by Rockpoint.

A total of approximately $750 million (including debt) is expected to be deployed by the JV to acquire and renovate single-family homes in premium neighborhoods that command price points and rents that average 30%-60% higher than those targeted by Invitation Homes’ traditional investment strategy.

The companies plan to focus on top-quality submarkets within the Western US, Southeastern US, Florida, and Texas. Invitation Homes will provide investment, asset management, and property management services to the JV, for which it will earn asset management and property management fees and have the opportunity to earn a promoted interest subject to certain performance thresholds.