Blackstone Group has agreed to buy single-family rental company Home Partners of America for $ 6 billion, betting that demand for suburban housing will remain high even if the pandemic abates.
Home Partners, which is being acquired by Blackstone Real Estate Income Trust, owns more than 17,000 homes in the United States, according to a statement released Tuesday. The company offers tenants the opportunity to purchase their rental, making it unique among its peers.
Single-family rentals have been a favorite bet over the past year, as real estate investors seek new places to invest during a pandemic that has driven Americans away from offices, hotels and shopping malls. At the same time, remote work and schooling created a strong demand for suburban homes from buyers and tenants, pushing up prices and lowering inventory.
âIt is clear that tenant demand is still robust, resulting in a significant increase in real estate cash flow,â said Jeff Langbaum, analyst at Bloomberg Intelligence. “Smart people with smart money want to get a share of it.”
Investors including Brookfield Asset Management, Nuveen Real Estate and the asset management arm of JP Morgan Chase have committed billions of new capital to the rental of single-family homes, which only started attracting interest on Wall Street ten years ago.
Blackstone, who made Invitation Homes the largest single-family homeowner following the foreclosure crisis in the United States, has rekindled her interest. Last August, she led a group of investors that acquired a minority stake in Toronto-based Tricon Residential, which owns and operates more than 31,000 homes and apartments.
For Blackstone, there may also be a case of seller regret. The company exited its stake in Invitation Homes in 2019, selling the last of its position at $ 30.10 per share.
Blackstone made about $ 7 billion from its stake in Invitation, more than doubling its money, Bloomberg reported at the time. But the company’s shares have risen 25% since then.
The influx of investor capital comes as low inventories are pushing prices up at the fastest rate ever and tenants are switching to rental homes over apartments. Invitation Homes posted an occupancy rate of over 98% in the first quarter, allowing the industry giant to raise rents on new leases at an all time high.