Blackstone Bets $6 Billion on Buying and Renting
Homes
Deal for Home Partners of America, owner of over 17,000 houses in U.S., is latest sign
Wall Street believes housing market will stay hot
Blackstone scooped up distressed single-family homes after the subprime crisis and
rented them out through a company called Invitation Homes.
PHOTO: ANDY JACOBSOHN
FOR THE WALL STREET JOURNAL
By Peter Grant
June 22, 2021 700 am ET
Blackstone Group Inc. has agreed to buy a company that buys and rents single-family homes
in a $6 billion deal that’s a sign Wall Street believes the U.S. housing market is
going to stay hot.
The giant investment firm has reached a deal to acquire Home Partners of America Inc.,
according to people familiar with the matter. Home Partners owns more than 17,000
houses throughout the U.S., which it bought, rents out and offers its tenants
the chance to eventually buy.
U.S. home sales soared last year at their fastest pace in 14 years, when low mortgage
rates and the rise of remote work during the pandemic sent buyers scrambling
to find larger living spaces.
The lack of homes for sale relative to demand and record housing prices have
slowed the pace of home sales in recent months. But on a historic basis,
the market remains red hot, and analysts say that demand from millennials
entering their prime homebuying years is expected to fuel demand for years to come.
Blackstone was among the big investment firms to buy houses in bulk in the aftermath
of the subprime crisis, when lenders sold off foreclosed homes at marked-down prices.
The New York firm built a portfolio of tens of thousands of single-family homes,
then rented them out through a company called Invitation Homes Inc.
In 2019, Blackstone exited from the single-family rental business when it sold
its last shares in Invitation Homes, which had become the largest U.S. firm
in this industry with 80,000 homes for lease. The firm put its toe back
in the market in 2020 by investing $240 million to buy a preferred equity stake
in Toronto’s Tricon Residential Inc., which buys single-family rentals in North America.
Real Estate
From aspirational residences to major commercial deals.
Blackstone’s deal for Home Partners, which people close to the matter say could
be announced as early as Tuesday, shows that Blackstone is turning even
more bullish on U.S. housing.
It is rejoining an expanding roster of Wall Street powerhouses that have
acquired single- family rental companies. Canadian property giant Brookfield
Asset Management Inc.
recently acquired a stake in a landlord that owns more than 10,000 U.S. homes. J.P.
Morgan Asset Management and Rockpoint Group LLC also have made big
investments in single-family rental operators.
The business is attractive to investors because growth can come from both
rising home prices and rent increases. The S&P CoreLogic Case-Shiller National
Home Price Index, which measures average home prices in major metropolitan
areas across the nation, rose 13.2% in the year that ended in March, up from a
12% annual rate the prior month.