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Invitation Homes Announces $300 Million Joint Venture with Rockpoint
Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Very Positive)
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Rhea-AI Summary
Invitation Homes (NYSE: INVH) has announced a new joint venture with Rockpoint Group, aiming to acquire higher price-point single-family rental homes in premium locations. The JV will operate with a total equity commitment of $300 million, where INVH contributes $50 million (16.7%) and Rockpoint contributes $250 million (83.3%). The initiative targets acquisitions with rents 30%-60% higher than its traditional strategy, focusing on top markets in the Western US, Southeastern US, Florida, and Texas.
Positive
Formation of a new joint venture with Rockpoint to expand growth opportunities.
Investment of $50 million by Invitation Homes into the joint venture.
Expected deployment of $750 million for acquiring and renovating homes in premium neighborhoods.
Targeting single-family homes with rents 30%-60% higher than previously focused properties.
Negative
None.
New Venture to Acquire Higher Price-Point Single-Family Rental Homes in Premium Locations
DALLAS--(BUSINESS WIRE)--
Invitation Homes Inc. (NYSE: INVH) (“Invitation Homes or the “Company”) announced today that it has entered into an agreement with Rockpoint Group, L.L.C. (“Rockpoint”) to form a new joint venture (“JV”) partnership that will acquire homes in premium locations and at higher price points relative to the homes currently targeted by the Company and its previous venture with Rockpoint, which the two companies announced in October 2020.
“This new JV will enable us to expand our growth opportunities and serve the growing number of renters by choice who place a high premium on location,” said Dallas Tanner, President & CEO of Invitation Homes. “We view this as complementary to our established core investment strategy that remains the focus of our on-balance sheet investment. In addition, we are thrilled to pursue this new JV alongside Rockpoint, with whom we have developed a strong and trusting partnership through our existing joint venture.”
“We’re excited to continue our partnership with Invitation Homes,” said Tom Gilbane, a Managing Member at Rockpoint. “They are best-in-class operators, and together we are focused on creating high-quality attainable housing to meet the growing demand for single-family rentals. We feel this unique strategy is complementary to our long-term focus on creating housing that serves our customers and betters our communities.”
The JV will be capitalized with a total equity commitment of $300 million, of which $50 million (16.7%) will be committed by Invitation Homes and $250 million (83.3%) will be committed by Rockpoint. A total of approximately $750 million (including debt) is expected to be deployed by the JV to acquire and renovate single-family homes in premium neighborhoods that command price points and rents that average 30%-60% higher than those targeted by Invitation Homes’ traditional investment strategy. The companies plan to focus on top-quality submarkets within the Western US, Southeastern US, Florida, and Texas. Invitation Homes will provide investment, asset management, and property management services to the JV, for which it will earn asset management and property management fees and have the opportunity to earn a promoted interest subject to certain performance thresholds.
Latham & Watkins LLP acted as legal advisor to Invitation Homes, and Gibson, Dunn, & Crutcher LLP acted as legal advisor to Rockpoint.
About Invitation Homes
Invitation Homes is the nation's premier single-family home leasing company, meeting changing lifestyle demands by providing access to high-quality, updated homes with valued features such as proximity to jobs and access to good schools. The company's mission, "Together with you, we make a house a home," reflects its commitment to providing homes where individuals and families can thrive and high-touch service that continuously enhances residents' living experiences.
About Rockpoint
Rockpoint Group, L.L.C. (“Rockpoint”) is a real estate private equity firm headquartered in Boston with additional domestic offices in San Francisco and Dallas. Rockpoint employs a fundamental value approach to investing and targets select product types located in major markets in the United States. Rockpoint utilizes a consistent strategy across distinct return profiles through its opportunistic and growth and income investment programs. Rockpoint targets assets with intrinsic long-term value, at attractive prices relative to replacement cost and stabilized cash flows, and with particular emphasis on value creation opportunities and complex situations. Since 1994, Rockpoint’s co-founders with others have sponsored 16 commingled funds and related co-investment vehicles through Rockpoint and a predecessor firm and have raised approximately $26 billion in capital commitments. As of September 30, 2021, Rockpoint’s investment team with others has invested or committed to invest in 460 transactions with a total peak capitalization of approximately $69 billion (inclusive of fund equity, co-investor equity and debt). To learn more about Rockpoint, visit www.rockpoint.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which include, but are not limited to, statements related to the Company's expectations regarding the activities of the JV and its impact on Invitation Homes, the pace of the JV’s capital deployment, the anticipated value of the JV portfolio and size of the JV, the anticipated acquisitions by the JV and the yield on such acquisitions, the performance of the Company's business, its financial results, its liquidity and capital resources, and other non-historical statements. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “guidance,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including, among others, risks inherent to the single-family rental industry and the Company's business model, macroeconomic factors beyond the Company's control, competition in identifying and acquiring properties, competition in the leasing market for quality residents, increasing property taxes, homeowners’ association fees, and insurance costs, the Company's dependence on third parties for key services, risks related to the evaluation and operation of properties, performance of the Company's information technology systems, risks related to the Company's indebtedness, and risks related to the potential negative impact of the ongoing COVID-19 pandemic on the Company’s financial condition, results of operations, cash flows, business, associates, and residents. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Moreover, many of these factors have been heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. The Company believes these factors include, but are not limited to, those described under Part I. Item 1A. “Risk Factors” of the Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the Securities and Exchange Commission (the "SEC"), as such factors may be updated from time to time in the Company's periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in the Company's other periodic filings. The forward-looking statements speak only as of the date of this press release, and the Company expressly disclaims any obligation or undertaking to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except to the extent otherwise required by law.
