A New York-based investment firm that is raising $1 billion to buy single-family homes nationwide bought property in Pierce County in April.
Pretium Partners LLC, profiled in a Wall Street Journal article Wednesday, said in an investor pitch that it planned to raise $1 billion nationwide in a bet that housing and rent costs will continue their rise.
Nationwide, Pretium manages a $3.7 billion investment portfolio that includes more than 18,000 rental homes, according to the company website. The Journal reports that Pretium rents and manages properties for its first investment fund under the name Progress Residential. A Pretium subsidiary, FREO Washington, owns dozens more.
In Pierce County, Progress Residential owns more than 40 homes, many of which were bought after the recession but before prices started to rebound, according to Pierce County data. The Journal says Pretium owns the fourth-largest pool of rental homes in the country.
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It’s about to own a lot more. This billion-dollar bet on the rental housing market is Pretium’s third housing-related investment fund, the Journal reported.
An attempt to reach Pretium about any future plans in Pierce County was unsuccessful.
Pretium is led by Donald Mullen Jr., the former head of Goldman Sachs Group Inc.’s mortgage and credit business. The former Wall Street executive helped oversee Goldman’s short against the U.S. housing market a decade ago, the Journal reported.
The home Pretium bought in Pierce County is in Roy and purchased in an April foreclosure sale for $227,600, according to Pierce County assessor’s records. The records say the two-story, 1,990-square-foot home was built in 2003. It is on two 2 acres of land and has three bedrooms and two-and-a-quarter bathrooms.
Home values in Pierce County have risen dramatically over the past year. On Wednesday, Northwest Multiple Listing Service reported that the median September home price in Pierce County rose 10.5 percent from September 2015 to $279,000. A separate report from ATTOM Data Solutions showed Pierce County’s affordability has dipped the most of any Puget Sound county when comparing historic median home prices and average wages.
At the housing market’s bottom four years ago, the median price for a single-family home in the county was $198,900. Pierce County home values have not yet recovered from the pre-recession high of $290,300 in March 2007, according to real estate data company Zillow.
Investment homes are not a foreign concept in Pierce County. Two years ago The News Tribune revealed that several investment firms were pouring millions of dollars into the single-family home market. Companies including American Homes 4 Rent, FREO Washington, Invitation Homes and THR Washington II were capitalizing on bargain prices after the housing market bottomed out in 2012.