Blackstone Group to Renovate Houses for Rent

Blackstone Group LP, a private-equity firm that specializes in commercial real estate, has recently started investing in the residential market by taking advantage of a 34 percent drop in single-family home prices.

New York—Blackstone Group LP, a private-equity firm that specializes in commercial real estate, has recently started investing in the residential market by taking advantage of a 34 percent drop in single-family home prices.

Blackstone has already spent more than $250 million on buying foreclosed single-family homes. The firm plans to renovate the houses and rent them out. So far Blackstone has acquired more than 1,500 homes in Phoenix and Southern California. Its strategy also includes buying properties in Florida, Northern California and Georgia—areas with the greatest number of distressed properties.

The firm has partnered with Tempe, Ariz.-based Treehouse Group LLC of, and Dallas-based Riverstone Residential Group.

With this new venture, Blackstone has become the biggest investor entering the single-family leasing market. Other competitors in this area include KKR & Co. and Colongy Capital LLC.

Representatives at Blackstone, Treehouse and Riverstone did not return calls for comment.