RXR has teamed up with One Investment Management to set up a $500M housing venture.

The joint venture focuses on rental housing and is zeroing in on Sun Belt and gateway cities in the U.S. Sun Belt cities are among the most competitive rental markets in the country, with a RentCafe analysis showing a large number of people fighting over each available apartment unit, though the region is losing steam.

The venture, which was built with traditional credit and structured equity, has already contributed to a $180M Phoenix project under construction, according to Bloomberg.

RXR has $18B in assets under management and 9,400 units in its multifamily portfolio. OneIM is a fund launched by Rajeev Misra, the former head of SoftBank's Vision Fund.

RXR CEO Scott Rechler told Bloomberg the firm is in a spot to finance distressed properties in the asset class. Misra, meanwhile, said the partnership appeals because the company has been looking for opportunities to dive into structured credit.

Traditional lenders like banks are still iffy on approving loans because of falling property values and an increase in nonperforming loans on their balance sheets. Multifamily landlords that can secure financing are facing climbing borrowing costs. That is slowing development — apartment starts fell 43% from last year.

Nontraditional investors like RXR, on the other hand, are seizing the chance to give out loans. Debt funds have stepped into the fray in a big way, particularly for bridge financing.

Over the last few years, RXR has primarily focused on investment in office. In January, RXR launched a $1B fund with Ares Management to buy struggling Class-A Manhattan offices. The duo provided $500M of initial seed funding and sought to raise the rest from other investors.

RXR was also a major investor in smart glass company View. In 2022, RXR led a $200M funding round for the firm and Rechler joined its board. The next year, RXR was part of a $50M credit facility to help the company avoid stock delisting due to financial inaccuracies on its statements. Despite that, View ended up filing for Chapter 11 bankruptcy protection in March and reached a deal to go private.

CORRECTION, APRIL 26, 1:35 P.M. ET: This story has been updated to clarify the venture between RXR and OneIM.