Taylor Morrison, Kennedy Lewis Partner on Build-to-Rent Financing Deal
Taylor Morrison Home Corporation (NYSE: TMHC), widely recognized as America’s Most Trusted® Home Builder, has announced a significant new financial agreement with Kennedy Lewis Investment Management (KLIM), a prominent alternative investment firm managing approximately $30 billion in assets. This strategic alliance centers around the establishment of a land and construction financing facility, unlocking a massive $3 billion in funding capacity. The facility is expected to support Taylor Morrison’s build-to-rent (BTR) division, Yardly, by accelerating land acquisition, land development, and the construction of new communities tailored for renters.
Scaling the Yardly Vision
At the heart of this financial partnership is Yardly, Taylor Morrison’s purpose-built rental brand designed to offer renters an upgraded single-family living experience. Unlike traditional multifamily apartment developments, Yardly communities provide spacious layouts, private backyards, and community-focused amenities—all crafted with the quality and design excellence for which Taylor Morrison is known.
According to Sheryl Palmer, Chairman and Chief Executive Officer of Taylor Morrison, the newly formed financing facility plays a pivotal role in scaling the Yardly platform.
“To support the efficient growth of our unique Yardly brand, this strategic financial facility agreement dedicated to our build-for-rent business will help to scale our existing core competencies of land acquisition, land development and efficient home construction,” said Palmer. “As we target optimal exit strategies for our growing pipeline of Yardly communities, this vehicle enhances our capital flexibility and return expectations. Ultimately, our hope is for Yardly renters to become future Taylor Morrison homeowners.”
The expansion of Yardly aligns with shifting housing preferences across the U.S., where affordability concerns and lifestyle choices are driving increased demand for high-quality rental homes. Taylor Morrison is responding with purpose-built, professionally managed communities that offer renters the benefits of single-family home living without the long-term financial commitment of ownership.
Enhancing Flexibility and Efficiency
This newly formed $3 billion facility provides more than just a source of capital; it’s a strategic vehicle designed to provide Taylor Morrison with balance sheet relief, improved cash flow efficiency, and greater optionality when managing its growing real estate portfolio. This flexibility is particularly important as the company evaluates asset dispositions and contemplates optimal exit strategies in an evolving market environment.
The structure of the agreement also complements Taylor Morrison’s diversified approach to land strategy. In addition to traditional land purchases, the company already leverages a range of tools including joint ventures, land banking arrangements, seller financing, deferred participation payments, and other capital-efficient mechanisms. The new facility with Kennedy Lewis represents a sophisticated addition to this toolkit, offering the ability to finance both new and existing assets under the Yardly brand.
“Taylor Morrison is pleased to work again with Kennedy Lewis and its managed affiliates on this financing vehicle, offering another layer of sophistication to our land strategies,” said Palmer.
A Continued Partnership Between Proven Players
This is not the first time Taylor Morrison and Kennedy Lewis have partnered. The two firms already have an established relationship through an existing land banking agreement that supports Taylor Morrison’s for-sale homebuilding operations. The current collaboration builds upon that successful framework and expands its scope to include rental-focused projects.
Kennedy Lewis, through its real estate-focused affiliate Millrose Properties Inc. (NYSE: MRP), is increasingly engaging in creative capital solutions that address the needs of modern homebuilders.
“We are pleased to support Taylor Morrison’s Yardly platform with this $3 billion financing commitment,” said Darren Richman, Managing Partner of Kennedy Lewis and CEO of Millrose Properties Inc. “This transaction demonstrates another use case for land banking as a capital solution to meet the diverse needs of our homebuilder counterparties as they seek creative ways to address today’s affordability challenges.”
KLIM has gained recognition in recent years for its agile, solution-oriented investment approach. By collaborating with institutional-grade partners like Taylor Morrison, Kennedy Lewis is helping to facilitate innovation in residential real estate at a time when flexibility and capital access are key to navigating market pressures, including rising interest rates, regulatory shifts, and evolving consumer expectations.
A New Vision for Rental Living
Yardly represents Taylor Morrison’s response to the growing demand for alternative housing options that blend the best elements of homeownership and rental convenience. These purpose-built rental communities are designed to fill the gap for individuals and families who prefer or require flexibility without sacrificing quality, space, or lifestyle.
Each Yardly community emphasizes thoughtful design and livability, with key features such as:
- Private, fenced backyards ideal for pets, gatherings, or personal relaxation.
- Modern interior finishes, consistent with Taylor Morrison’s standards for craftsmanship and style.
- On-site amenities that rival traditional apartment complexes, including walking trails, community parks, and pet-friendly features.
- Professional property management, ensuring a consistent, high-quality living experience.
This approach is especially attractive to younger generations who may be postponing homeownership due to financial constraints, changing priorities, or job mobility. It also resonates with older adults seeking low-maintenance living arrangements while retaining the feel of a single-family home.
Long-Term Growth Outlook
The build-to-rent sector has seen exponential growth in recent years, and analysts expect this trend to continue. Rising mortgage rates, limited housing inventory, and changing demographics have all contributed to a surge in demand for well-designed rental homes. Yardly is positioned to capture a significant share of this demand, particularly as more institutional capital flows into the space.
With this new financial facility in place, Taylor Morrison is equipped to expand Yardly’s footprint at scale, while maintaining financial discipline and capital efficiency. The partnership with Kennedy Lewis underscores the confidence both firms have in Yardly’s long-term value proposition.
The $3 billion financing facility is more than just a transaction—it marks a pivotal moment in the evolution of Yardly and signals Taylor Morrison’s ongoing commitment to innovation in housing. By aligning with Kennedy Lewis, the company is reinforcing its ability to execute a dual strategy: delivering high-quality homes for sale, while simultaneously developing best-in-class rental communities through Yardly.
As Taylor Morrison builds on its reputation as a trusted homebuilder, it continues to evolve to meet the diverse needs of modern renters and homeowners alike. The Yardly platform stands as a testament to the company’s forward-thinking approach, and with the support of strategic partners like KLIM, it’s poised for meaningful expansion in the years ahead.
