Brookfield Asset Management is close to buying 3,800 single-family rentals from rent-to-own startup Divvy Homes for $950 million, according to a source familiar with the matter. The deal will expand Brookfield's single-family rental portfolio to approximately 20,000 properties. Divvy Homes faced challenges due to rising interest rates, which made its rent-to-own model less appealing. Brookfield, on the other hand, has been aggressively investing in the residential sector.
Brookfield Asset Management Ltd. is close to finalizing a deal to acquire 3,800 single-family rentals for approximately US$950 million from startup Divvy Homes , according to a source familiar with the matter. The source, who requested anonymity to discuss a private transaction, revealed that approximately 65% of the homes are situated in prominent markets like Atlanta, Dallas, and Tampa.
This acquisition will significantly bolster Brookfield's Maymont Homes division, increasing its property portfolio to approximately 20,000 units. While the deal is progressing, it remains subject to finalization and could potentially fall through. Representatives from both Brookfield and Divvy declined to comment on the ongoing negotiations.Previously, Fast Company reported that the two companies were nearing an agreement, although the financial details were not disclosed. Divvy Homes, co-founded by CEO Adena Hefets in 2017, operated on a rent-to-own model. The company acquired properties on behalf of customers, allowing them to rent with the option to purchase the house in the future. This model gained traction during a period of high home prices and low interest rates, attracting both prospective buyers and venture capital firms.In 2021, Divvy secured new funding at a valuation of $2 billion, led by investors such as Tiger Global Management and Caffeinated Capital. However, rising interest rates have presented challenges to the rent-to-own model, making it more difficult for Divvy's clients to exercise their purchase options and increasing the company's own financing costs. In August 2023, Divvy announced a pause on acquisitions, intending to resume once interest rates decline sufficiently. The company subsequently conducted layoffs.Brookfield's extensive global real estate portfolio encompasses various property types, including apartments, warehouses, offices, and more. In 2020, the firm acquired a controlling stake in single-family landlord Conrex and raised $300 million for a dedicated vehicle to purchase houses. Brookfield has actively been expanding its residential holdings. Last year, a Brookfield Asset Management fund acquired an $893 million portfolio of student housing properties at institutions like Texas A&M University
Brookfield Asset Management Divvy Homes Single-Family Rentals Real Estate Acquisition Rent-To-Own
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