Värde Partners, a leading global alternative investment firm, announced it has provided more than $250 million of capital to purchase and fund the development of single family residential projects across three transactions in the U.S.
“The U.S. housing market represents a significant investment opportunity for Värde, with compelling supply demand dynamics driven by low interest rates, demographic trends and secular shifts accelerated by Covid-19,” said Brian Schmidt, Partner at Värde. “These deals demonstrate the speed, scale and flexibility with which our platform can invest across the capital structure to provide appropriate financing solutions while traditional lenders continue to retrench.”
The transactions announced today include:
A $100 million land bank facility with Dream Finders Homes (DFH), a leading homebuilder based in Jacksonville, Florida. The capital will be used to acquire land in Florida and Colorado, with a focus on Jacksonville, Orlando and Denver, to be developed into residential lots by DFH. Having first invested in DFH in January 2019, this deal expands Värde’s ongoing partnership with the company, working together to develop high quality and affordable homes in attractive communities.
The acquisition of Verde River, an ‘active adult’ resort lifestyle master-planned community (MPC) in Scottsdale, Arizona, including 55+ housing and an agreement with Shea Homes, one of the country’s leading private homebuilders, to continue developing and building out the project. The community will include 1,210 homes and is already well established with over 600 homes sold.
The acquisition of Sunfield, a late-stage MPC based in Austin, Texas, and formation of a joint venture with IHP Capital Partners to manage the project. Located in one of Austin’s fastest growing suburbs, the community is nearly half complete with 2,770 lots remaining out of 6,550 in a market with high demand for more affordable homes.
Brendan Bosman, Managing Director at Värde, added: “We have deep experience in housing-related investments and we welcome the opportunity to deepen existing relationships and establish new ventures, as we continue to grow our footprint across the U.S. residential real estate market. MPCs in particular have maintained strong levels of demand with buyers seeking attractive lifestyle communities that offer substantial open space.”
Värde believes there are substantial opportunities in certain segments positioned to outperform the broader U.S. housing market, which entered the pandemic from a position of relative strength. Household formation was in line with new build activity, there were record low inventories and vacancy rates, relatively cheap mortgages, reasonably controlled credit, good levels of affordability, healthy levels of homeowner equity and a positive outlook on prices.