Invitation Homes Basks In Sun Belt, Snaps Up 500 New Homes For $140 Million

Invitation Homes Inc. INVH will pay about $140 million for 500 newly built homes in the Sun Belt.

Deliveries of the homes, located in Charlotte, North Carolina; Jacksonville, Florida; and Nashville, Tennessee, are expected to begin later this year. They are being acquired through new relationships with three top-tier homebuilders, according to Invitation's announcement.

"As a lack of supply continues to be a primary culprit in the high cost of housing, we are proud to further broaden our strong homebuilder partnerships to create additional housing," Invitation Chief Investment Officer Scott Eisen said. "At the same time, we believe our strategy of partnering with the largest and best homebuilders to grow our footprint across the country offers the best risk-adjusted returns to our stockholders."

Invitation received deliveries of 648 newly built homes in 2023 and anticipates deliveries of about 1,000 homes from its new product pipeline this year.

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"Our homes provide a choice for individuals and families to live in a great neighborhood that might not otherwise be accessible to them and create a chance for those same households to save money toward their goals," Eisen said.

Institutional investors like Invitation Homes have gotten a bad rap for gobbling up single-family rental properties. Although the perception is that investors institutional investors own the bulk of single-family rental properties in the U.S., the reality is that they own about 3% of that market, according to a Moody's Analytics report.

Many are concerned that investor interest in affordable housing is making homeownership inaccessible for average Americans. U.S. Rep. Adam Smith (D-Washington) introduced the End Hedge Fund Control of American Homes Act of 2023 in December to address the concerns. The bill would limit hedge funds and private equity firms from buying single-family homes, which could reshape the housing landscape amid housing supply shortages and escalating prices.

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In addition to Invitation Homes, which owns nearly 80,000 single-family homes, the largest institutional players include Progress Residential, which owns more than 95,000 single-family properties; American Homes 4 Rent at nearly 60,000; and Tricon Residential, which owns about 38,000.

"The purchasing of single-family homes by hedge funds, especially in the current housing market, serves only to make profits for the investors and provides no value to the communities where these homes are located," said U.S. Sen. Jeff Merkley (D-Oregon), a sponsor of the bill.

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