The future of real estate investing: Pretium’s Don Mullen on the rapidly changing asset class
Mar 21, 2025
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Don Mullen, Founder and CEO of Pretium, shares insights from his journey in real estate investment with an eye on the future. He discusses the evolving housing market, emphasizing the shift towards renting as millennials face a housing shortage. Mullen elaborates on innovative renovation strategies amidst economic changes and the critical role of single-family rentals. From his unexpected path from aspiring detective to Wall Street, he reflects on the lessons learned in finance and the importance of work-life balance.
The shift from homeownership to renting in the U.S. is reshaping the housing market, influenced by rising interest rates and changing labor dynamics.
Pretium's integrated strategy as both an asset manager and operator allows them to efficiently navigate the evolving real estate landscape and meet diverse market needs.
Deep dives
The Genesis of Pretium and Market Insights
The founding of Pretium in 2012 arose from the recognition of significant shifts in the housing market, specifically the need for improved mortgage lending practices and the movement of Americans from homeownership to rentership. Observations from historical financial crises led the founder to believe that the global financial crisis would reshape the mortgage sector and create a monumental investment opportunity in single-family homes. This period also marked a turning point, as it was seen as a generational opportunity to invest in distressed assets available at substantial discounts. Such insights, paired with a desire to create a lasting impact outside the corporate world of Goldman Sachs, motivated the establishment of Pretium as a real estate-focused investment firm.
Changes in the Housing Market Landscape
Since the financial crisis, the housing market has undergone considerable changes, characterized by a significant reduction in systemic risk and a stable yet modest shift in homeownership rates. The implementation of qualified mortgages has streamlined underwriting processes, resulting in a larger portion of Americans becoming renters while the dream of homeownership remains attainable for many. Despite efforts to rationalize home construction, the country faces a long-term housing shortage driven by increasing demographics that are outpacing the supply of homes available. This ongoing imbalance is expected to persist until at least 2040, indicating that the demand for housing will continue to outstrip supply for many years.
Pretium's Role in the Real Estate Ecosystem
As one of the largest private owners and operators of single-family homes in the U.S., Pretium has strategically capitalized on market opportunities by managing a wide array of residential assets, including homes and rental properties. The firm not only lends to home renovators but is also a significant player in non-qualified mortgages, thereby serving diverse segments of the market. By being both an asset manager and an operator, Pretium can optimize workflow and improve efficiency for investors while maintaining control over operational standards. This dual-focused strategy allows Pretium to navigate the complex real estate landscape while meeting the needs of various stakeholders within the housing market.
The Future Landscape of Renting vs. Owning
Looking ahead, the importance of home ownership in the U.S. may shift as long-term renting becomes more common and is increasingly accepted as a viable lifestyle choice. Changes in the labor market and rising interest rates have created a scenario where renting can sometimes be more financially sensible than owning a home, raising questions about traditional perceptions of housing. Factors such as increased labor mobility and lower home affordability for many Americans necessitate a vibrant rental market that can accommodate those unable to purchase. With evolving public policies and market realities, there’s potential for a fundamental reset in how housing is viewed in relation to economic mobility and wealth creation.
