Don Mullen, founder and CEO of Pretium Partners, explains the macroeconomic housing shortage underpinning institutional single-family rental investing.
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“And whether you look at Stanford, Harvard, Fannie Mae, almost any economic analyst will tell you we're short somewhere between three and seven million houses.”
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More from Don Mullen
AssertionSupported
Mullen: Institutional rentals invest billions annually in new home construction
“We're putting billions every year into building new houses that during a cycle like this wouldn't take place.”
Don MullenJun 29, 2023▶ 46:04Don Mullen –Single-Family Rentals at Pretium (Capital Allocators, EP.324)
PredictionNot checkable as stated
Mullen: TPG-Angelo Gordon deal marks the start of a massive M&A wave
“I think you're going to see what Angelo Gordon did with TPG is the beginning of a massive wave of this. There's a lot of mergers that are going to take place.”
Don MullenJun 29, 2023▶ 54:05Don Mullen –Single-Family Rentals at Pretium (Capital Allocators, EP.324)
Opinion
Mullen: Bear Stearns was a sales firm, not a trading shop
“And Bear Stearns wasn't a trading firm, despite the image of it. It was a sales firm.”
Don MullenJun 29, 2023▶ 12:12Don Mullen –Single-Family Rentals at Pretium (Capital Allocators, EP.324)
Disclosure
Mullen: Pretium pivoted to buying owner-occupied 21st-century homes
“We ended up having to map the industry out by only buying owner-occupied houses, so houses that homeowners are choosing to sell, and therefore, we're buying high-quality assets, not distressed assets, and by driving homogeneity in the earliest phases, similar …”
Don MullenJun 29, 2023▶ 24:17Don Mullen –Single-Family Rentals at Pretium (Capital Allocators, EP.324)
PredictionDidn’t hold up
Mullen: Pretium will likely acquire 15,000 to 20,000 houses in 2023
“And now in portfolios, as an example, we'll probably buy 15 to 20,000 houses this year. But almost entirely in portfolio form.”
Don MullenJun 29, 2023▶ 40:01Don Mullen –Single-Family Rentals at Pretium (Capital Allocators, EP.324)
AssertionNot checkable as stated
Mullen: Internal operations drove Pretium's rental NOI margins to 65%
“When I owned houses and those folks serviced my house, you had NOI margins of like 30%. When we put an asset management layer and create a federation of them and force tech on them, we were able to get to 45%. Once we built our internal structure where we did …”
Don MullenJun 29, 2023▶ 40:30Don Mullen –Single-Family Rentals at Pretium (Capital Allocators, EP.324)
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