Highland Capital Is Close to $300 Million Rental-Home Deal

(Bloomberg) -- Highland Capital Management LP, the asset manager founded by Jim Dondero and Mark Okada, is under contract to buy a portfolio of single-family rental homes managed by VineBrook Partners LLC for more than $300 million, according to people with knowledge of the deal.

Highland, which operates a diverse set of investment strategies including high-yield credit and real estate funds, is acquiring the homes through its affiliate NexPoint Real Estate Advisors LP from Magnetar Capital LLC. Highland intends to commit additional capital to further expand its rental-home portfolio beyond the acquisition, said the people, who asked not to be identified because the matter isn’t public.

Representatives from Highland Capital, Magnetar and VineBrook, which manages the homes for Magnetar, declined to comment.

The deal comes as single-family rentals receive fresh interest from large investors, including a number of funds new to the space. They include the Teacher Retirement System of Texas and Singapore’s GIC Pte. AG Mortgage Investment Trust Inc., which is managed by Angelo, Gordon & Co., said on Wednesday that it had reached an agreement to buy 1,225 single-family rental homes for about $140 million.

Single-family rentals, which were traditionally the domain of mom-and-pop landlords, first received widespread interest from institutional investors following the foreclosure crisis, when firms including Blackstone Group LP and Tom Barrack’s Colony Capital Inc. snapped up cheap homes.

VineBrook managed more than 2,600 homes at the end of last year, according to an estimate from Amherst Holdings LLC.

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