Pretium Partners picks up 2,000 Zillow homes to kick off iBuying wind-down

NYC-based investment firm plans to rent houses

National /
Nov.November 10, 2021 10:15 AM
Zillow CEO Rich Barton and Pretium Partners CEO Don Mullen (Getty, Pretium, iStock)

Zillow CEO Rich Barton and Pretium Partners CEO Don Mullen (Getty, Pretium, iStock)

The great sell-off has started for Zillow as 2,000 of its homes are changing hands to an investment firm.

New York City-based Pretium Partners has agreed to buy thousands of homes from Zillow, according to the Wall Street Journal. It’s not clear how much Pretium paid for the homes, but Zillow reportedly received market price on them.

The homes are located in 20 different markets in the United States. The deal reportedly expands inventory for Pretium’s single-family rental business that was already 70,000 homes strong.

For Zillow, it’s the beginning of what could be a lengthy process to end its three-year-old iBuying business. After citing a backlog of 7,000 homes and halting new purchases last month, the company announced it is dissolving its failing iBuying business and laying off a quarter of its staff.

Zillow owns 9,800 homes it needs to sell in the wind-down, the Journal reports, in addition to 8,200 it was in contract to buy. The company anticipates losing between 5 and 7 percent on the sale of its tens of thousands of homes.

Pretium is not the only company eyeing Zillow’s inventory for single-family rentals. American Homes 4 Rent, a Calabasas-based REIT, is also in the early stages of talks with Zillow.

Dallas-based Invitation Homes has also been involved in talks over home purchases, the Wall Street Journal previously reported.

The single-family rental market is a hot one, as investors are seeing an average expected risk-adjusted return on built-to-rent investments of 8 percent, according to Green Street. Through the end of July, asking rents on single-family homes had risen nearly 13 percent year-to-date, its highest increase in five years.

Pretium was recently in the news for the wrong reasons, in the crosshairs of a House select subcommittee for allegedly forcing out renters during the CDC’s eviction moratorium.

[WSJ] — Holden Walter-Warner





    Related Articles

    arrow_forward_ios
    Zillow CEO Spencer Rascoff is stepping down as his co-founder takes over
    Zillow CEO Spencer Rascoff is stepping down as his co-founder takes over
    Zillow CEO Spencer Rascoff is stepping down as his co-founder takes over
    Placeholder image
    Zillow to pay $50M for StreetEasy
    Zillow to pay $50M for StreetEasy
    Chinese President Xi Jinping (Getty)
    Chinese regulators ease some real estate controls
    Chinese regulators ease some real estate controls
    (iStock)
    Rents in New York and South Florida metros surged more than 30%, led nationwide rise
    Rents in New York and South Florida metros surged more than 30%, led nationwide rise
    Children’s Magical Garden at at 157 Norfolk Street (Google Maps, Facebook)
    Children’s Magical Garden claps back against developer who claimed defamation
    Children’s Magical Garden claps back against developer who claimed defamation
    432 Park pad trades for $26M, supertall’s priciest deal since 2019
    432 Park pad trades for $26M, supertall’s priciest deal since 2019
    432 Park pad trades for $26M, supertall’s priciest deal since 2019
    25 Park Avenue in Larchmont (WilliamPitt)
    Estate famed for turtle soup has new distinction: $11M sale price
    Estate famed for turtle soup has new distinction: $11M sale price
    Travis Soukup and Yongxing Deng with Fifth Wall's Brendan Wallace (Aloft/Zack Phillips, Jeff Newton, iStock)
    Appraisal startup Aloft closes $20M Series A led by Fifth Wall
    Appraisal startup Aloft closes $20M Series A led by Fifth Wall
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...