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NexPoint Explores IPO for Rental Home Landlord as Housing Booms

VineBrook Homes Trust, which operates more than 13,500 SFRs, has held discussions with advisers about going public.

(Bloomberg)—Single-family landlord VineBrook Homes Trust Inc. is exploring an initial public offering amid a white-hot housing market that has boosted demand for rental properties from investors and tenants alike.

VineBrook, managed by an affiliate of James Dondero’s NexPoint Real Estate Advisors, has held discussions with advisers for an IPO that could come as soon as this year, according to people familiar with the matter.

The company, which operates more than 13,500 houses in the U.S., could wait to go public until 2022 or beyond or decide to remain private, said one of the people, who asked not to be named because the matter is private.

A representative for NexPoint and VineBrook declined to comment.

The potential offering comes at a time when commercial real estate investors are showing newfound enthusiasm for rental houses, which were once viewed as difficult to manage and largely owned by mom-and-pop investors.

Large investors began building single-family rental portfolios following the U.S. foreclosure crisis, buying houses at distressed prices and building out property management platforms. Three publicly traded landlords emerged from the first wave of institutional ownership, led by Invitation Homes Inc., which owns more than 80,000 units.

The pandemic has ignited new interest. Real estate investors need new places to put money to work at a time when the prospects for hotels, malls and office buildings is uncertain. At the same time, Americans are seeking larger living spaces to work remotely, pushing rents on single-family rents higher at the fastest rate in more than a decade.

Firms led by Blackstone Group Inc., KKR & Co. and Invesco Real Estate have made new investments in single-family rentals in recent months.

NexPoint, which also manages a real estate investment trust that invests in apartments, acquired a predecessor to VineBrook in 2018. The single-family landlord purchased nearly 4,000 homes through a pair of transactions earlier this year, a filing shows, paying more than $500 million.

VineBrook operates in more than a dozen markets with roughly half its portfolio spread across the Ohio cities of Cincinnati, Columbus and Dayton. The average rent on the company’s homes is about $1,000 a month, putting it in a more affordable part of the rental market than other institutional single-family landlords.

The company’s board of directors includes Ark Investment Management CEO Cathie Wood and economist Art Laffer.

© 2021 Bloomberg L.P.

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