(Bloomberg) — Funds managed by Invesco Real Estate are backing Mynd Management to spend as much as $5 billion, including debt, purchasing about 20,000 single-family rental homes in the U.S. in the next three years.
The partnership marks a “significant moment” for the single-family rental industry, Doug Brien, chief executive officer and co-founder of Mynd, said in an interview. More than half of the country’s multifamily properties are owned by institutional investors compared with an estimated ownership of 2% to 3% of single-family rentals, a gap that he expects to narrow in time.
“As traditional commercial real estate investors that invested in multifamily as their key strategy have moved into single-family rental, we’re seeing the market flooded with institutional capital,” Brien said. He acknowledged that dynamic will make it more competitive for Mynd to find properties, but touted its data-driven technology as better enabling it to make offers across the U.S.
Oakland, California-based Mynd, founded in 2016, will be focused on buying exclusively for the real estate arm of Invesco Ltd., and will continue to build out its management platform, which includes more than 7,000 homes owned by retail investors and other institutions, he said. Those homes are in 25 cities including Houston; Austin, Texas; and Orlando, Florida. Mynd plans to expand to cities in the Midwest and Southeast such as Oklahoma City, St. Louis and Jacksonville, Florida.
“Covid has been an accelerator for migration to more-affordable cities as households pursue favorable tax situations and jobs,“ said Brien, a former kicker in the National Football League.
Invesco is separately leading a $40 million financing round for Mynd, which Brien said will be spent on technology and the acquisitions team. Mynd has been buying as many as 50 homes monthly, a figure he expects to grow to 1,000 by next year. That would outpace the roughly 600 monthly purchases that Waypoint Homes, which he co-founded, was making before it became part of Invitation Homes Inc.
“We know single-family rental represents a tremendous opportunity to invest in an emerging asset class that will allow us to provide a high-quality living experience to Americans seeking their next home,” Pete Cassiano, managing director at Invesco Real Estate, said in an emailed statement. Invesco Real Estate’s head of North America Bert Crouch is joining Mynd’s board.
Investors including Thomvest, Common Fund, Squarepoint, Assurant, DivcoWest and Jackson Square Ventures also participated in the round, which values Mynd at about $300 million.
The single-family rental sector has attracted institutional investors including JPMorgan Chase & Co., Brookfield Asset Management Inc. and Canada’s PSP Investments. Separately, Centerbridge and Allianz Real Estate said in March they led a $1.25 billion equity commitment to Upward America Venture, a partnership with Lennar Corp. that intends to buy homes.
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