GI Partners has backed acquirer of distressed, single-family properties Waypoint Real Estate Group. The GI investment will initially enable the acquisition of more than $250 million in single family rental homes.
Waypoint Real Estate Group, the nation’s leading acquirer of distressed, single-family properties, and GI Partners, a leading mid-market private equity firm, announced today that GI has made a significant equity investment in Waypoint to fund its expansion. The GI investment will initially enable the acquisition of more than $250 million in single family rental homes, and is anticipated to ultimately support the acquisition of more than $1 billion in single-family rental homes over the next two years.
Since its founding in 2008, Waypoint has successfully acquired nearly 1,000 homes in the San Francisco Bay Area and Inland Empire in Southern California, and developed a sophisticated proprietary system to underwrite and manage the portfolio of homes. With the GI investment, Waypoint plans to launch a national expansion, with the goal of entering into multiple new geographic markets in 2012.
“Our approach to buying and renovating distressed homes and leasing to residents who are committed to a path to future home ownership is a viable solution to our nation’s housing crisis,” said Colin Wiel, managing director and co-founder of Waypoint. “Our unique approach to acquiring homes and converting them into rental properties speaks directly to the Federal Reserve’s recommendations included within its recent white paper. This partnership with GI Partners ensures we can take the next step in our company’s evolution.”
GI Partners will invest in Waypoint through GI Partners Fund III L.P., which has approximately $1.9 billion of capital commitments from institutional private equity and real estate investors.
“Waypoint has not only developed an effective strategy for investing in distressed single family homes, but has built a business that has positive social and economic benefits in the communities in which they invest,” said Rick Magnuson, executive managing director of GI Partners, who has joined Waypoint’s Board of Directors in conjunction with the investment. “We believe Waypoint has the potential to thrive given the current market dislocation in single family housing and the sustained tenant demand for rental property.”
Waypoint employs proprietary technology to identify residential real estate markets characterized by strong rental demand and an identifiable pipeline of discounted home purchase opportunities.
The company, after acquiring distressed single-family houses, renovates each property so they are as attractive and vibrant as possible, improving the quality of each local neighborhood. The company’s lease program, Lease Plus Rewards(TM), helps put families on a path to future home ownership and keep families connected with their communities.
Doug Brien, Waypoint’s managing director and co-founder, added, “GI has played a major role in building several impressive businesses over the past decade, and we are eager to work with GI leadership to build Waypoint into another success story.”
Gary Beasley, an industry veteran who recently joined Waypoint as managing director, added, “There are nearly four million homes nationwide which are now either bank-owned or in a serious state of delinquency or distress. To address this massive problem we are beginning conversations with lenders to facilitate our “REO-to-rental” model which can help avoid the dislocation and negative societal consequences of foreclosures.”
About Waypoint Real Estate Group
Based in Oakland, Calif., Waypoint Real Estate Group (www.waypointhomes.com) has created a next-generation real estate company with an innovative business model to help address the lack of liquidity contributing to the prolonged U.S. housing crisis. The Waypoint solution centers on buying distressed single-family houses, renovating them, and then leasing them to residents via innovative leasing programs which are designed to provide a path to future home ownership for the residents. A leader in the emerging REO-to-rental industry since its founding in 2008, Waypoint has acquired nearly 1,000 homes in California, and is poised to begin an aggressive national expansion program in 2012.
About GI Partners
GI Partners, headquartered in Menlo Park, Calif., makes investments in asset-intensive, middle-market businesses and portfolios of assets located in North America and Western Europe. Key sectors of focus include commercial real estate, specialty healthcare, IT infrastructure, leisure and financial services. Across all of its investments, GI Partners seeks to identify companies with market leading positions and to establish a partnership orientation with management that drives operational value creation. GI Partners’ investments have included First Republic Bank, STAG Industrial, SoftLayer Technologies and Digital Realty Trust.