VineBrook Externalizes Property and Asset Management, Scrapping Full-time Workforce

VineBrook Homes Trust Inc., a private real estate investment trust externally advised by an affiliate of NexPoint Advisors, announced it is moving to an externalized property and asset management model. This transition, which went into effect on June 10, will result in the elimination of the company’s entire full-time workforce and the departure of two key executives.

The company’s subsidiaries have entered into comprehensive property management agreements with Evergreen Residential Management, LLC. This move will transfer day-to-day responsibility for the renovation, leasing, maintenance, and operation of the company’s VineBrook portfolio to Evergreen. The full transition, or externalization, is expected to be completed by the end of 2025.

Under the new management agreements, Evergreen will receive various fees, including a 2.5% property management fee on collected rents, a shared services fee up to 6% of collected rents, and commissions for new and renewal leases. Additional fees will apply for major repairs, maintenance, vacancy, and turnover services. The initial term for these agreements is seven years, with automatic one-year renewals.

Concurrent with this externalization, the company committed to a reduction in force impacting approximately 500 employees and representing 100% of its full-time workforce. This reorganization aims to streamline operations by outsourcing all property and asset management functions. VineBrook expects to complete these headcount reductions by the end of the year.

In connection with these workforce changes, the company anticipates incurring pre-tax cash expenditures for severance and one-time termination benefits ranging from $2.8 million to $3.1 million. The majority of these payments are expected in the fourth quarter of 2025.

VineBrook also announced the June 10 termination of two executives, Dana Sprong and Ryan McGarry. Both will receive benefits aligned with their severance agreements.

In addition to the property management agreements, the owners have also entered into asset management agreements with Evergreen Asset Management LLC, for asset management, operational support, accounting, and disposition services. Evergreen Asset Management will receive an annual fee of 0.24% of the net asset value of the properties under management, along with a 1% disposition fee on property sales it facilitates.

A separate development services agreement was also signed with Evergreen Development Services LLC. It outlines the identification, sourcing, inspection, and acquisition of new properties for the operating partnership. Fees for these services include acquisition fees ranging from 0.75% to 2% of the property’s acquisition price, along with due diligence, clean and secure, and project administration fees. The agreement also includes potential measurement period service fees and runoff date service fees if acquisition targets are not met.

As a direct consequence of this comprehensive externalization, the company estimates a non-cash impairment charge of $5.7 million related to finite-lived intangible assets, specifically capitalized software development costs that are no longer expected to provide future benefits.

At the end of December 2024, the REIT’s chief executive officer since August 2024, John Good, also assumed the role of president following Brian Mitts’ resignation. Mitts had served as president, CEO, chief financial officer, assistant secretary, and treasurer.

The REIT, which had a total net asset value of approximately $3.14 billion as of March 31, 2025 – a 2.25% decrease from the prior quarter – is primarily focused on acquiring, renovating, leasing, and managing single-family rental homes located in large- to medium-sized cities and suburbs in the Midwest, Heartland, and Southeast.

The company’s net asset value per share as of the end of Q1 2025 was $54.56, a nearly 6% decrease from March 2024’s $57.99 NAV.

• Cash flows from operating activities: During the three months ended March 31, 2025, net cash used in operating activities was $2.4 million compared to net cash provided by operating activities of $3 million for the same period in 2024. 
• Cash flows from investing activities: During Q1 2025, net cash provided by investing activities was $36.5 million compared to net cash provided by investing activities of $36 million for the same period in 2024. 
• Cash flows from financing activities: During Q1  2025, net cash used in financing activities was $33.1 million compared to net cash used in financing activities of $8.9 million for the same period in 2024.

The VineBrook portfolio is the company’s primary reportable segment comprised of 20,601 homes as of March 31, which represents a significant majority of the company’s consolidated portfolio and operations. As of the end of March, VineBrook – through its operating partnership and consolidated subsidiaries – owned and operated 22,752 single family rental homes located in 20 states.

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