Lennar makes giant bet on single-family rentals

Homebuilder launches $4B platform to seize on pandemic-fueled need for space

National /
Mar.March 25, 2021 01:00 PM
Lennar CEO Rick Beckwitt and a selection of the company's homes (Lennar)
Lennar CEO Rick Beckwitt and a selection of the company’s homes (Lennar)

One of the country’s largest homebuilders is making a giant bet on the single-family rental market.

Lennar is launching a $4 billion platform that will buy single-family homes and townhomes to turn into rentals. Called Upward America Venture, it will target “high-growth markets,” the company announced.

Miami-based Lennar said the venture will initially be capitalized with a $1.25 billion equity commitment led by Centerbridge Partners and Allianz Real Estate.

CEO Rick Beckwitt said a portion of the properties will have a rent-to-own option, which gives tenants the opportunity to buy without having to fork over a substantial down payment.

The pandemic has led to surge in interest in single-family home rentals. Some city dwellers, unable to buy but searching for more space than an apartment can offer, have moved into rental homes in the suburbs.

Large investors and developers have also seized on the moment.

Over the last year, more than 50,000 rental homes were built, roughly two-thirds more than the average over the past four decades.

California State Teachers’ Retirement System and Pacific Coast Capital Partners recently formed a $1 billion joint venture to invest in the build-to-rent sector. And earlier this month, Quinn Residences said it would build thousands of rental homes in the Southeast after securing a $500 million commitment from an unnamed sovereign wealth fund.






    Related Articles

    arrow_forward_ios
    Southern California’s housing market undoubtedly cooling (Getty)
    SoCal home sale prices inch down…but they’re still high
    SoCal home sale prices inch down…but they’re still high
    Emile Haddad will remain on the board for FivePoint (Getty)
    CEO of FivePoint, among Cali’s largest homebuilders, stepping down
    CEO of FivePoint, among Cali’s largest homebuilders, stepping down
    (Unsplash via Abbie Bernet)
    SoCal home prices hit another record in July, but rate of increase slows
    SoCal home prices hit another record in July, but rate of increase slows
    State Senator Scott Weiner is the primary author of Senate Bill 9 (Getty, California Legislative)
    Study: California’s “upzoning” bill would not lead to widespread redevelopment
    Study: California’s “upzoning” bill would not lead to widespread redevelopment
    The L.A. County median of $790,000 was 23 percent higher than last June (Getty)
    SoCal home prices reach yet another record high in June
    SoCal home prices reach yet another record high in June
    Aerial Shot of a Suburban Street in San Fernando Valley (Getty)
    San Fernando Valley home prices top another record in May
    San Fernando Valley home prices top another record in May
    (iStock)
    SoCal home prices keep rising while supply dwindles
    SoCal home prices keep rising while supply dwindles
    PG&E CEO Patricia K. Poppe, San Diego Gas & Electric CEO Caroline Winn and Southern California Edison CEO Kevin M. Payne. (Getty, PG&E, SDGE, Edison)
    PG&E among utilities looking to cut subsidies on solar homes
    PG&E among utilities looking to cut subsidies on solar homes
    arrow_forward_ios

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

    Loading...