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Pretium Signs $600 Million Joint Venture to Develop Rental Homes

The firm is partnering with Indianapolis-based builder Onyx+Fast to develop more than 2,000 rental houses.

(Bloomberg)—Pretium Partners is launching a joint venture that will invest roughly $600 million to develop new homes for lease, expanding in a corner of U.S. housing that’s increasingly popular with investors.

Pretium, whose portfolio of 70,000 homes makes it the second largest single-family landlord in the U.S., is partnering with Indianapolis-based builder Onyx+East, to develop more than 2,000 rental houses. The deal follows another joint venture, announced in September, for the firm to build 3,000 homes through a partnership with builder Crescent Communities.

Homes specifically built to be rented out have emerged as a key part of Wall Street’s love affair with housing. The model lets investors deploy large amounts of capital in a single transaction and the projects can be easier to acquire and maintain than portfolios of older, scattered homes.

Investors have committed billions of dollars to the projects since the Covid-19 pandemic sparked a race to acquire suburban housing. Among Pretium’s closest competitors, Invitation Homes Inc. has a strategic relationship with builder PulteGroup Inc., and American Homes 4 Rent has an in-house building operation.

Pretium’s new venture will build three- and four-bedroom homes in Ohio, Indiana and the west coast of Florida, targeting sites with easy access to job hubs, retail centers and good schools. The projects will include the same design elements as the homes Onyx+East includes in its for-sale communities, according to a statement.

While Pretium continues to buy homes through other channels, it views build-to-rent as an important part of its business, said Matt Johnston, a managing director at the New York-based firm.

“We really want to be a leader in build-to-rent and make an impact on solving the great need for housing in the U.S.,” said Johnston. “The need for housing is huge.”

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