News & Media

Single-Family Rentals Strong as Blackstone Backs Out

Blackstone dominated a still-successful real estate business model developed during the recession – landlords with thousands of single-family rental homes.

NEW YORK – Once known as a giant in the single-family rental space, Blackstone is getting out of that market. The investment firm sold its last stake in Invitation Homes Inc., the company it created during the housing crisis to snatch up tens of thousands of foreclosed properties and turn them into rentals.

Blackstone has been decreasing its stake in the single-family rental business since March through a series of stock offerings. The company raked in about $7 billion – more than double what it originally invested, according to its securities filings.

In the midst of the housing crisis, Blackstone went on a homebuying spree, purchasing 30,000 homes in about 18 months and spending about $2 billion fixing the properties.

“The hardest part wasn’t buying the homes – it was building the business,” Blackstone President Jonathan Gray told The Wall Street Journal. “We created a company from scratch. It was created on a yellow pad. It was an idea. Now it’s a real business.”

Invitation Homes continues to be a profitable business with a booming rental portfolio. Its stock shares are up 46% this year. Invitation Homes currently owns about 82,000 properties. That’s significantly more than its closest competitor, American Homes 4 Rent, which has 53,000 homes.

Source: “Blackstone Moves Out of Rental Home Wager With a Big Gain,” The Wall Street Journal (Nov. 21, 2019) [Log-in required.]

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