Huber Homes is a business that owns and rents a portfolio of approximately 1,900 single family homes and townhomes in the Ohio River Valley.
In January 2013, at a time when the company’s portfolio had rebounded well from the Global Financial Crisis, its private owner sought a sale of the business to retire from operational responsibility. Magnetar sourced this opportunity through a mutual relationship.
In the early 2010’s Magnetar explored opportunities to invest in the prospective recovery in residential home markets. Magnetar found that investments in the Midwest could provide both healthy current yields as well as exposure to home price appreciation.
In Magnetar’s due diligence of Huber, multiple levers were identified to enhance returns: operational enhancements, leverage, and sale at a lower discount to market value.
As a long-term partner, Magnetar has contributed ‘sweat equity’ on multiple fronts:
- Buildout of technology and systems
- Recruitment of key management positions
- Provision of real estate regulatory expertise
- Formulation of a capital investment strategy
In February 2013, Magnetar closed on the purchase of Huber Homes for approximately $71mm. Magnetar engaged Vinebrook Homes, a real estate investment firm with whom it had an existing joint venture relationship, to manage Huber Homes, its portfolio and organization.
Approximately two years after acquisition, Magnetar secured approximately $60mm of non-recourse financing on the Huber portfolio at an attractive rate.
In Q4 2018, Magnetar undertook a sale of the business.
Additional information regarding the Huber investment is available to certain current investors via the existing Investor Portal.