Beazer Forms Partnership to Buy Rental Homes

At a time when home builders are struggling to compete with the bargain basement prices of distressed properties and more families are turning to rentals as credit stays tight, Beazer Homes USA seems to have adopted the motto, "If you can't beat 'em, join 'em." A year ago, Beazer started buying distressed “pre-owned” homes in its Phoenix and Las Vegas markets, renovating them, and then renting them out to people who might one day be buyers. On Thursday, the Atlanta-based company announced it is putting its 200 single-family home portfolio into a new real estate investment trust called Beazer Pre-Owned Rental Homes Inc. The trust was formed as a partnership between Beazer and an investor group led by and arranged by affiliates of Kohlberg Kravis Roberts and Co. The REIT is called Beazer Pre-Owned Rental Homes Inc., and the plan is to grow the business fast into a leader in the single-family rental home market, the news release said. “We believe our investment in BPRH allows us to unlock the value in our rental homes business and grow it more rapidly than we otherwise could within Beazer,” Beazer CEO Allan P. Merrill said in the news release. “BPRH’s ability to focus specifically on the rental homes market and attract external capital to scale the business represents a compelling—and differentiated—value for our shareholders.”

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