Wall Street won’t rest until it become the biggest – and perhaps only – landlord in the US.
At least that’s the impression one gets by observing the behavior of the two Wall Street “black” giants, Blackrock and Blackstone. As a reminder, the WSJ sparked widespread outrage recently when it exposed what most industry insiders had known for a long time, namely that Blackrock (and other institutional investors) have been ravenously gobbling up US real estate. Now it’s Blackstone’s turn.
On Tuesday, the WSJ reported that Blackstone – which already is not only America’s largest landlord but also the world’s largest real estate company with a $325 billion portfolio – has agreed to buy single-family rental company Home Partners of America for $6 billion, betting the demand for suburban housing will stay hot even as the pandemic eases. Home Partners owns more than 17,000 houses in the United States; the company buys, rents out and eventually offers its tenants a chance to buy them. Now all those functions will be done by the largest US private equity firm.
Single-family rentals have been a favorite institutional bet over the past year, as real estate investors have sought new places to invest during a pandemic that kept Americans away from offices, hotels and malls. The result, as the WSJ reported, has been a frenzy among 200 companies and investment firms who have entered the house hunt: computer-assisted flipper Opendoor Technologies, money managers including J.P. Morgan and BlackRock, platforms such as Fundrise and Roofstock that buy and arrange for the management of rentals on behalf of individuals and builder LGI Homes Inc., which now reports wholesale home sales to bulk buyers in its quarterly results.
At the same time, remote work and school created strong demand for suburban homes by buyers and renters alike, pushing prices up and inventory down.
“Clearly the tenant demand is still robust, and that’s driving significant cash flow increases at the property level,” said Jeff Langbaum, an analyst at Bloomberg Intelligence. “Smart people with smart money want to get a piece of that.”- READ MORE
Listen to the insightful Thomas Paine Podcast Below --