After a tumultuous few years, Divvy Homes, a startup that operated a rent-to-own model, has been acquired by a division of Brookfield Properties for approximately $1 billion. This acquisition marks a significant drop from its $2.3 billion valuation in 2021, but is not a fire sale as previously reported.

The deal, expected to close in mid-February, will see Divvy Homes become a part of Maymont Homes, a Brookfield unit that operates in over 40 markets across the United States. Since its founding in 2016, Divvy Homes has created 2,000 homeowners to date, according to a written statement from the company.

Divvy Homes' business model involved buying homes and renting them back to renters for three years, allowing them to build savings to eventually own the property themselves. However, the company faced significant challenges when mortgage interest rates surged in 2022, leading to three rounds of layoffs in a single year.

Despite these setbacks, Divvy Homes had raised over $700 million in debt and equity from prominent investors such as Tiger Global Management, GGV Capital, and Andreessen Horowitz (a16z). The company's last known funding occurred in August 2021, a $200 million Series D round led by Tiger Global Management and Caffeinated Capital, which valued the company at $2 billion.

The acquisition by Brookfield Properties is seen as a strategic move to expand its presence in the real estate market. Maymont Homes, with its established presence in over 40 markets, will likely benefit from Divvy Homes' innovative approach to homeownership. The deal is expected to have significant implications for the real estate industry, particularly in the wake of rising interest rates and changing consumer behavior.

The acquisition also raises questions about the future of the rent-to-own model, which has been gaining popularity in recent years. As the real estate market continues to evolve, it will be interesting to see how companies like Divvy Homes and Maymont Homes adapt to changing consumer needs and preferences.

In conclusion, the acquisition of Divvy Homes by Brookfield Properties marks a significant shift in the real estate market. As the industry continues to navigate the challenges of rising interest rates and changing consumer behavior, this deal is likely to have far-reaching implications for companies operating in the space.