Big money is pouring into single-family rentals.
RET Ventures, a Utah-based venture capital firm, raised $165 million for a fund that plans to invest in technology for single-family rental and multifamily owners and operators across the U.S.
The company surpassed its initial target of $130 million. Participants included affiliates of some of the largest apartment and single-family rental operators in America, among them Essex Property Trust, Invitation Homes, Mid-America Apartment Communities, Greystar Real Estate Group, Starlight Capital and Starwood Capital Group.
Investors are increasingly betting on the single-family rental market, where demand has exploded thanks to remote work and rising costs of home ownership. Large single-family rental companies such as Invitation Homes Inc. and American Homes 4 Rent are increasing their share of the housing market.
Critics worry, however, that single-family rentals could worsen the affordability crisis or lead to more evictions.
Christopher Yip, a partner at RET Venture, said the fund is investing in early-stage companies. A particular focus is on something he calls “rent-tech”, which involves technology tied to rental properties.
He said the strategy is to address “pain points” for rental owners and operators.
RET Ventures is among the growing number of funds to invest in proptech. For many of these companies, the goal is to “modernize” technology-resistant parts of the real estate industry such as home closings, title insurance and construction.
Valuations for these firms have skyrocketed as many seek to go public through special purpose acquisition companies. RET Ventures has backed SmartRent, a home automation company for property managers and renters that plans to go public through a SPAC at an initial valuation of $2.2 billion.
RET Ventures has also invested in Passive Logic, an autonomous building platform, and Kasa Living, a short-term rental company, according to CrunchBase.
RET Ventures was founded in 2017 by John Helm, who was previously chief financial officer of the commercial brokerage Marcus & Millichap.