(Bloomberg) -- Koch Industries Inc.’s real estate arm is betting on U.S. rental homes.

Koch Real Estate Investments, a subsidiary of billionaire Charles Koch’s company, made a $200 million preferred-equity investment in Amherst Holdings LLC’s single-family rental business, according to people with knowledge of the matter.

The transaction, which had been in discussions for more than a year, closed earlier this month, said some of the people, who asked not to be identified because the transaction hasn’t been disclosed publicly. The deal will boost Amherst’s capacity for buying houses to $2 billion, based on a roughly 80% loan-to-value ratio, said one of the people.

Spokesmen for Koch and Amherst declined to comment.

The deal could also provide synergies between Austin, Texas-based Amherst and Koch’s consumer and building products arm, which includes manufacturers of carpeting, glass, insulation, shingles, wallboard and lighting systems. Amherst, which operates roughly 22,000 homes, could use Koch products when renovating homes or use the relationship to build a supply chain for developing purpose-built rental homes, one of the people said.

That model, known as “build-to-rent,” has gained popularity with investors including JPMorgan Chase & Co.’s asset-management arm, which recently expanded a $625 million joint venture with landlord American Homes 4 Rent to develop roughly 2,500 single-family rental homes in high-growth markets in the U.S. West and Southeast.

Ladder, Front Yard

Koch earlier this month bet on another corner of real estate by providing a roughly $200 million credit facility to mortgage real estate investment trust Ladder Capital Corp. As part of that deal, Koch has the option to make a $32 million equity investment in Ladder by the end of the year.

On May 4, Amherst terminated a $2.3 billion deal to acquire publicly traded rival Front Yard Residential Corp., a single-family landlord with about 15,000 properties. The agreement, reached in February, fell apart after the coronavirus pandemic roiled real estate markets amid stay-at-home orders nationwide.

In breaking the deal, Amherst agreed to pay a $25 million termination fee, purchase $55 million worth of Front Yard shares and provide the landlord with a $20 million unsecured loan facility.

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