Blackstone has agreed to acquire Home Partners of America, a buyer and operator of single-family rental properties, for $6bn, a signal of confidence from the world’s largest real estate manager that the US housing market boom is here to stay.
The private equity firm’s real estate arm, which has $378bn worth of property assets, will add a portfolio of more than 17,000 homes across the US. HPA will become part of Blackstone Real Estate Income Trust, a perpetual capital vehicle Blackstone manages for income-focused investors.*
“This partnership with Blackstone Real Estate and its consistent support of our business will ensure we are well-positioned to expand the reach of our program to provide access to more homes,” said Bill Young, co-founder and chief executive of HPA.
US housing demand has boomed during the pandemic as millions of Americans seeking larger homes farther from city centres took advantage of record-low interest rates and government stimulus to buy new properties. That led to a sharp increase in prices as demand has often outstripped supply.
The median price for existing US homes hit a record high of $350,300 in May, rising 23.6 per cent from the same month a year ago, according to data released on Tuesday by the National Association of Realtors.
Blackstone is considered to be one of the shrewdest real estate players and its decision to buy HPA is set to give comfort that the demand for new homes will remain strong despite some recent signs that supply is catching up with demand. Home sales rose 6.7 per cent in early June, compared with the same period in May.
Blackstone emerged as a major landlord in the US after setting up Invitation Homes, which combined some of its assets with those owned by distressed rivals, in the aftermath of the financial crisis.
Invitation Homes became the largest owner of single-family homes in the US after it bought up tens of thousands of houses during the foreclosure crisis. It went public in 2017 and Blackstone exited its stake in the company two years later.
The New York firm re-entered the market in 2020 with a $300m investment in Tricon Residential, a Canadian rental housing company that owns more than 31,000 homes.
Blackstone’s foray into the housing market has been met with some criticism. In a 2019 report on housing, the UN accused the group of “pushing low-income, and increasingly middle-income people from their homes”, while Elizabeth Warren, the Democratic senator from Massachusetts, called it out for “shamelessly” profiting from the housing crisis.
The company has maintained that its investments stabilised the housing market and created jobs.
*This story has been updated to correct a reference to Blackstone’s perpetual capital vehicle.