We're not sure this news is particularly good for builders, but according to The Wall Street Journal, this investor is betting heavily that the market for single-family rentals is poised for growth.
Donald Mullen Jr., the former Wall Street executive who a decade ago helped oversee Goldman Sachs Group Inc.’s lucrative bet against the U.S. housing market, co-founded real-estate investment firm Pretium Partners LLC, which is raising $1 billion to buy single-family homes to rent out to tenants, according to fund raising documents reviewed by The Wall Street Journal.
Mr. Mullen, the onetime head of Goldman’s mortgage-and-credit business, is now pitching pensions, endowments and other large investors on a wager that, four years after the housing market hit bottom, rents and home prices will continue to rise.
“We believe tight credit availability is preventing new households from being able to obtain mortgages to purchase their first home,” Pretium wrote in its 69-page pitch to investors. “Households that have been unable to obtain mortgages have become renters, thus driving high occupancy rates and robust rent growth.”