A Dallas-Fort Worth developer announced Monday that it is branching out into Florida’s rental market after acquiring 80% of a company located in the state.
Gehan Homes, based in Addison, purchased the controlling stake from Southern Impression Homes, located in Jacksonville, Florida, for $85 million.
Gehan, a subsidiary of Sumitomo Forestry, currently has communities across Texas in places such as Dallas-Fort Worth, Austin, Houston, and San Antonio areas. The company is the 29th largest homebuilder in the United States, with more than 3,000 total closings in 2021 and $1.2 billion in revenue, according to the Builder 100 list.
“This transaction gives our company a foothold in the burgeoning and developing build-to-rent space and provides an opportunity to diversify our offering,” John Winniford, president and CEO of Gehan Homes, said in a statement.
“As the macroeconomic environment changes, higher home prices and rising interest rates should only increase demand for rental housing,” the executive continued.
The acquisition marked Gehan’s first attempt to break into the build-to-rent industry that Southern Impression Homes specializes in.
“We see build-to-rent as complementary to our core business. This strategic relationship provides the opportunity to expand Southern Impression’s business model into markets within our existing footprint,” Winniford explained.
Chris Funk, one of the founders of Southern Impression Homes, will remain with the organization to continue in his role as CEO.
Funk explained, “We are very excited to join the Gehan family and continue our mission [of] providing affordable quality build-to-rent homes … This partnership will pave the way for Southern Impression Homes to quickly and efficiently enter new markets by utilizing Gehan’s expertise and local relationships across their extensive footprint.”
Southern Impression Homes currently operates roughly 5,000 properties in northeast, north, central, and southwest Florida. The company had also expanded into Georgia as well, with construction taking place in the area surrounding Atlanta.
The press release explained that the company “was founded in 2015 to address the undersupplied need for single-family build-to-rent units. To maximize efficiency and manage cost controls, Southern Impression maintains select product lines consisting of single-family units ranging from 1,200 SF – 2,000 SF and units from 950 SF – 1,300 SF for multifamily projects.”
Gehan’s holding company, Sumitomo Forestry, explained in a separate press release that “By entering the favorable market environment of Florida, Sumitomo Forestry is aiming to increase the number of houses it supplies in the U.S.”