Home rentals

Blackstone bets $ 6 billion on suburban home rentals in the United States

“It is clear that tenant demand is still robust, resulting in a significant increase in real estate cash flow,” said Jeff Langbaum, analyst at Bloomberg Intelligence. “Smart people with smart money want to get a share of it.”

Investors such as Brookfield Asset Management Inc., Nuveen Real Estate and the asset management arm of JPMorgan Chase & Co. have committed billions of new capital to single-family home rentals, which have only started to attract the market. Wall Street interest than ten years ago.

Blackstone, who made Invitation Homes Inc. the largest single-family home owner after the foreclosure crisis in the United States, has rekindled her interest. Last August, he led a group investors who have acquired a minority stake in Toronto-based Tricon Residential Inc., which owns and operates more than 31,000 homes and apartments.

For Blackstone, there may also be a case of seller regret. The company sold its stake in Invitation Homes in 2019, selling the last of its position at $ 30.10 per share.

Blackstone made around $ 7 billion from his stake in Invitation, more than doubling his money, Bloomberg reported at the time. But the company’s shares have risen 25% since then.

The inflow of investor capital comes as low stocks push prices higher in the the fastest ever pace, and tenants are opting for rental homes rather than apartments. Invitation Homes posted an occupancy rate of over 98% in the first quarter, allowing the industry giant to raise rents on new leases to a record rate.

Rising rents and low inventory levels have also made single-family homeowners a target across the political spectrum. Conservative Book Author JD Vance begin a firestorm on Twitter recently claiming that Wall Street investors make it difficult for ordinary Americans to buy homes.

In 2019, Democratic Senator Elizabeth Warren struck down Blackstone for “shamelessly” profiting from the foreclosure crisis in the United States, arguing that Wall Street’s investment in single-family homes was a “huge loss for American tenants.”

Home Partners of America, which has received backing from KKR & Co. and BlackRock Inc., has a business model that could help its new owner avoid some criticism. The company’s leases give tenants the option of buying their homes, and Blackstone has said she intends to continue the program.

The option allows Home Partners of America, which has explored a initial public offering in 2018, to practice rents above the market, according to a recent rating company report.

“The fundamental tenet of the HPA platform is to provide residents with the option of living in the home of their choice with the option of purchasing it,” Jacob Werner, senior managing director of Blackstone Real Estate, said in a statement. . “We intend to pursue this goal and expand access to housing across the United States”

Blackstone Real Estate Investment Trust, known as BREIT, is a non-public real estate investment trust managed externally by a subsidiary of Blackstone.

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