Real Estate

JPMorgan Is Set To Become America’s Next Big Landlord

Weeks after the banking giant unveiled a new property management system for rentals, JPMorgan announced it’s investing in a $1 billion single-family built-for-rent venture.

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Last month, banking giant JPMorgan unveiled a property management system to help landlords operate their properties and tenants pay their rent.

This week it unveiled a major new landlord that could benefit from the service: Itself. The company plans to raise $1 billion in a bid to join the wave of institutional investors buying single-family homes to rent them out, JPMorgan’s partner announced this week.

JPMorgan Chase is forming a partnership with built-for-rent institutional investor Haven Realty Capital to acquire and build a massive portfolio of single-family rental homes.

“The for-sale housing market has been significantly hampered by recession fears, inflation and rising interest rates placing a burden on homebuilders and their ability to add to the housing stock,” Haven founder and managing principal Sudha Reddy said in a statement.

The pair of companies will target homes in communities across the Sun Belt with 50 to 200 homes that are between 1,500 square feet and 2,500 square feet.

The move follows JPMorgan‘s announcement last month that it had developed Story, a property management platform for screening tenants, communicating with them, collecting payments and even analyzing properties before buying.

Institutional investors have been pouring money into acquiring communities of single-family homes to rent them. They also began forming partnerships with U.S. homebuilders to construct single-family homes that will remain rentals.

The share of all single-family homes built this year that will be rented rather than sold rose to its highest level in at least three decades in 2022, according to the National Association of Home Builders (NAHB) new data released on Thursday. 

Single-family rentals made up 6 percent of all new homes built this year, more than twice the historical share, NAHB reported.

While there had been signs of a slowdown by institutional investors in recent months, JPMorgan’s entry shows continued interest in the space heading into 2023.

The companies will start with $415 million in seed funding and aim to close on 250 homes in the Atlanta metro area within the next three months.

“This partnership will allow us to continue working with U.S. homebuilders, who are becoming increasingly comfortable selling entire communities to operators like Haven to lease to residents who want to live in a home but can’t afford to buy or prefer to rent,” Reddy said in the statement.

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