Helping renters achieve the American dream of homeownership wasn’t quite as profitable as the creators of Divvy Homes hoped.
Now, the startup rent-to-own landlord with a portfolio of single-family properties across more than a dozen U.S. markets is being acquired by Maymont Homes, a branch of Brookfield Properties.
The rent-to-own startup Divvy Homes is being sold to Maymont Homes, a subsidiary of Brookfield Properties.
Once valued at almost $2B, the company is being “sold for parts” in what was characterized as a fire sale by FastCompany, which first reported the news. A sales price was not available, and Brookfield and Divvy did not immediately respond to Bisnow’s requests for comment.
Optimism was high for Divvy when the company, helmed by CEO Adena Hefets, was founded in San Francisco in 2017. Divvy bought homes for rental tenants, giving them three years to purchase their homes from the company. A portion of rent payments were set aside for future down payments.
Investors such as Andreessen Horowitz, Tiger Global Management and Caffeinated Capital saw promise in the company, which owned 7,000 homes worth a collective $1.7B in 2021, The Real Deal reported. Divvy’s value soared to $2B following a $200M funding round that year.
But things went downhill for the startup shortly thereafter, due in part to a challenging interest rate environment. Divvy laid off most of its employees in 2022 and 2023, leaving it with a bare-bones staff.
Tenant complaints about the company surfaced in a 2023 report from The New York Times. The story included allegations of inadequate repairs and eviction threats.
One family in suburban Atlanta told the outlet they experienced electrical issues, mold and severe leaks in the three-bedroom home they rented from Divvy.
“When it floods, you can feel the water squishing under the floor tiles,” tenant Jeneyha Wheatley-Frett said at the time.
Some customers who ultimately bought homes from Divvy reported they were unhappy with the process and its costs, and a March 2024 attempt to revive the company's fortunes with a subscription-based homeownership readiness program appeared to fall flat, according to FastCompany.
Maymont Homes, once known as Conrex Property Management, manages more than 10,000 single-family rental homes, according to its LinkedIn page. Brookfield Asset Management bought a controlling stake in the company in 2020 as single-family rentals took off nationally.