Alternative asset manager TPG has taken a majority ownership stake in homebuilder Lennar’s multifamily division, Quarterra, with plans to raise more capital to fund thousands of units in the development pipeline.
TPG is making a $1 billion commitment in the deal and expects to raise additional funds for growth, according to a statement announcing the deal. Miami-based Lennar will keep a minority ownership stake.
The move follows years of losses by Quarterra that have been a drag on Lennar’s overall earnings. The losses have come amid challenges to ground-up developers in recent years such as rising construction and borrowing costs.
TPG, meanwhile, has been looking to deploy billions of dollars into new real estate investments.
The firm, co-headquartered in San Francisco and Fort Worth, Texas, said last spring that its real estate divisions were looking to spend $13 billion in “dry powder,” and in November the company said it had closed a new fund, that at $2.1 billion, overshot its target by more than 35%.
With the deal for Quarterra, TPG said it will focus on Emblem communities, a strategy dedicated to the creation of “attainable, high-quality rental options nationwide.”
Dan Frydman, business unit partner with TPG Real Estate, said in the statement that “Quarterra’s proven multifamily platform combines quality, consistency, and scale to deliver communities built to meet the full spectrum of needs of today’s renters.”
He added that the combination is needed “as demand for modern, attainable rental housing continues to grow."
Charlotte, North Carolina-based Quarterra will continue to be led by CEO Brad Greiwe, according to the statement.
Quarterra has created more than 43,000 units across the United States since 2011, with about 13,000 more units in the pipeline, according to the statement.
In recent years, Quarterra has been selling off properties in markets including Chicago, Seattle and Portland, Oregon. It also has launched new projects, including one of Seattle’s largest multifamily developments in years.
In 2024, Lennar sold a more than 5,200-unit Quarterra portfolio to global investment firm KKR for $2.1 billion. That came soon after Quarterra formed a joint venture with build-to-rent company Invitation Homes to combine the companies’ rental-home holdings.