Investor raises $1 billion for more rental home purchases

An investor that last year bought thousands of new houses from Texas homebuilder D.R. Horton has raised $1 billion to make more rental home buys.

New York-based Pretium Partners last summer bought 4,000 rental homes from Horton located in multiple U.S. markets.

The investment manager now owns 7,500 built-to-rent homes in 37 cities and 11 states.

Pretium is also making loans to small homebuilders, according to a report by Bloomberg News.

“Decades of under-building and under-investment have led to today’s shortage of viable housing in the United States,” Josh Pristaw, Pretium’s head of real estate, said in a statement. “That deficit can only be fixed with new capital invested to create new housing supply.

“We are proud to be in a position to create necessary new housing throughout the United States and eager to continue investing in new homes to expand housing choice and supply over the next decade.”

Along with rental houses, 10-year-old Pretium also invests in real estate, mortgage finance, and corporate debt.

Last year the company had $51 billion in assets under management.

The Dallas-Fort Worth area is one of the country’s fastest-growing markets for single-family rental home construction.

Last year, builders started 5,260 single-family rental units in Dallas-Fort Worth – an 18% increase from 2022, according to Dallas-based housing analyst Residential Strategies. These rental homes made up more than 10% of North Texas’ single-family home starts last year.

In 2023 D.R. Horton earned more than a half billion dollars selling 3,006 single-family rental homes and 1,582 multifamily rental units to investors.

“Our rental property inventory at December 31st was $3 billion, which consisted of $1.4 billion of single-family rental properties and $1.6 billion of multifamily rental properties,” Horton’s CEO Paul Romanowski said in the company’s most recent conference call with investors.

He said the builder expects its sale of rental houses to increase this year.

Housing analysts predict that single-family rental construction will continue to grow because of a lack of existing houses for investors to purchase.

“Watch for large single-family rental investors to shift increasing allocations into new construction and build-for-rent single-family communities,” Jay Parsons, chief economist with Richardson-based RealPage, said in a social media post.

In January, investor Blackstone Inc. agreed to pay $3.5 billion for Canada-based Tricon Residential which has about 38,000 rental homes in the U.S.