The nation's largest single-family rental landlord is taking over the management services of thousands of single-family rentals owned by Nuveen in a move signaling an exit by the investment manager away from managing its single-family rental business.
Nuveen, the investment management arm of TIAA, has outsourced the management of about 3,000 single-family rentals it owns to Dallas-based Invitation Homes, a company spokesperson with Invitation Homes confirmed to CoStar News, while Nuveen retains ownership of the single-family rentals. The move is a change from a commitment Nuveen made in October 2020 to invest up to $400 million in its then-new Sparrow platform to enter the single-family rental business in the nation's Sun Belt.
The addition of Nuveen's single-family rental portfolio to Invitation Homes bolsters the landlord's growing third-party management platform. The company told investors it planned to expand its management business this year to third parties after closing a deal with an undisclosed ownership group to manage about 14,000 single-family rental houses.
“Invitation Homes serves an important role in the nation’s overall housing market by providing choice, flexibility and professional service to the growing share of households who are choosing the ease and savings of leasing versus owning a home," an Invitation Homes company spokesperson told CoStar News. "We are proud to provide professional property and asset management services for our approximately 88,000 wholly owned and joint venture homes, as well as approximately 17,000 third-party owned homes.”
Invitation Homes isn't a stranger to Nuveen or TIAA. The single-family rental landlord expanded its Dallas headquarters, signing a lease for about 50,000 square feet of office space in a building owned by TIAA last year. The new office was expected to be completed for Invitation Homes in recent weeks.
Invitation Homes CEO Dallas Tanner told investors in January that providing professional management services to large portfolio owners is "the natural evolution and expansion" of the firm's platform it has built for the past 12 years. The move fits into the company's existing operations and adds value to its business by increasing scale within its markets, he said.
Tanner told investors the company expects to announce more third-party management agreements this year.
The additional single-family rentals in its management portfolio bulk up areas where Invitation Homes already has a presence in the Sun Belt. According to Sparrow's website, the company has rental homes in Phoenix, Arizona; Atlanta, Georgia; Nashville, Tennessee; Jacksonville, Orlando and Tampa, Florida; Charlotte and Raleigh-Durham, North Carolina; and Dallas-Fort Worth and San Antonio, Texas.