JPMorgan is getting into the build-to-rent market starting with investments in Atlanta. A joint venture agreement was reached between megabank JPMorgan and Haven Realty Capital on November 15. Together the companies are spending up to $1 billion to acquire build-to-rent properties.
Haven Realty Capital got its start in Los Angles in 2010. The company became an early adopter of the build-to-rent and it has owned or operated 10,000 homes across the U.S. Haven expanded out of single-family build-to-rent in 2015 with the start of a multifamily platform. Since then, the company has purchased and asset-managed thousands of apartments across the U.S. This combined experience positions Haven well as JPMorgan’s new partner.
Additionally, according to Haven Realty Capitals website it controls over $1 billion in rental communities in various phases of development, vertical construction, ownership, etc.
The initial installment includes $415 million in equity. A deal for 250 homes in three Atlanta communities could close within the next 90 days.
This is interesting because JPMorgan partnered in early 2020 with American Homes 4 Rent deploying $625 million of equity and developing approximately 2,500 single-family rental homes in high-growth markets across the Southeast and West.
Build-to-rent is posed to continue to do well in a market where entry-level homes are now priced at $400,000 with interest rates pushing 7%. Unfortunately, the pressures on housing have created a situation that has priced most first-time buyers out of the market. Many of these would-be buyers are choosing to rent. But, don’t be fooled, not all of those renting must rent, many could buy. They are renters by choice. Read our Profile of a Modern Renter to discover the many reasons that people choose to rent versus buy.
Build-to-rent started to gain popularity after the Great Recession as a way to work through the plethora of foreclosed homes. And whether folks love it or hate it, it is here to stay. Our article What’s Driving Build to Rent: Main Street or Wall Street touches on some of the reasons for this popular trend.
The joint venture is a clear sign that institutional investors are still moving forward with investments in today’s ever-changing real estate market.
“It’s still the belle of the ball,” Jacobi recently told Atlanta Business Chronicle. “Build-to-rent is here to stay … and it is going to become a bigger, necessary component of the housing stock.”