Blackstone Acquires SFR Firm in $6B Deal
- Jun 23, 2021
Blackstone’s real estate business has struck a $6 billion deal to acquire Home Partners of America, a single-family rental (SFR) company that owns more than 17,000 homes across the U.S.
The investment by Blackstone Real Estate Income Trust Inc. (BREIT), which is expected to close in the third quarter, expands Blackstone’s foothold in the SFR sector as institutional investors continue to flock to the niche asset class.
Last August, Blackstone led a $300 million minority investment in Tricon Residential, which currently holds more than 35,000 SFR homes and apartment units in the U.S. and Canada. That investment came shortly after Blackstone sold its stake in Invitation Homes, the largest SFR owner in America, which Blackstone formed in 2012 and took public in 2017. BREIT is externally managed by a Blackstone subsidiary and has about $196 billion in investor capital under management.
READ ALSO: Experts Discuss Growing SFR, BFR Markets
Led by Bill Young, co-founder & CEO, Home Partners of America operates across 74 metros and acquires homes in select communities. The company caters to people who want to live in a single-family home but aren’t ready or able to buy. The firm’s Lease with a Right to Purchase Program allows residents to lease the home for three to five one-year terms, with the option to purchase the home at a predetermined price.
BREIT said in a prepared statement that its investment in Home Partners of America will be supported by its perpetual capital, allowing for a long-term approach to managing the properties. The trust noted that it will support the firm’s management team as it explores ways to expand housing access for lower-income households.
These opportunities include the Choice Lease program, which Home Partners of America launched in 2019 to support residents whose household income is at or below 100 percent of the area median income. BREIT also plans to continue and expand the company’s financial planning assistance program offered to all residents.
Blackstone’s latest bet continues a string of major deals in the burgeoning SFR sector. Global real estate investment manager Invesco Real Estate plans to deploy up to $5 billion to help SFR company Mynd acquire 20,000 homes, in a new partnership just announced this month.
In April, real estate investment firm DivcoWest agreed to plow $250 million into a joint venture with Atlas Real Estate that aims to spend $1 billion buying and renovating SFR homes throughout the western U.S. That deal came on the heels of homebuilding giant Lennar Corp. launching a $4 billion SFR platform with institutional investors including Centerbridge and Allianz Real Estate in the previous month.
Also in March, the Great Gulf Group teamed up with Westdale Real Estate Investment and Management and a global institutional investor to build, own and operate SFR homes in the Sunbelt region. The partners committed $200 million in equity initially with the potential for a further $200 million investment.
Despite the flurry of activity in the sector, institutional ownership—or portfolios with more than 2,000 properties—is estimated to represent between 2.1 and 2.5 percent of total SFR units, or 350,000 to 400,000 homes, according to a report by Altus Group.