Blackstone Buys Home Partners of America

Investors Bet on US Real Estate Market

Private equity firm Blackstone Group (BX) is betting that red-hot demand for real estate will continue. Blackstone recently inked a $6 billion deal to buy Home Partners of America, a company which buys and rents residential homes. The transaction is a sign that Wall Street thinks the US real estate market will not cool down anytime soon, despite a lack of inventory.

Sales of homes surged last year as mortgage rates fell and people working remotely searched for roomier houses. That growth has been blunted in recent months by a lack of inventory and surging prices. Nevertheless, many investors believe that demand from millennials in their home-buying years will drive growth in the future.

Blackstone Sends a Message

Following the subprime real estate crisis which took place more than a decade ago, Blackstone and other large investment firms bought up houses on the cheap. Blackstone owned tens of thousands of single-family homes, which it rented out via Invitation Homes (INVH).

Blackstone sold its remaining stake in Invitation Homes in 2019, but began investing in real estate again last year. It purchased a $240 million preferred equity stake in Tricon Residential, which buys and rents homes in North America and is now purchasing Home Partners of America. Blackstone joins Brookfield Asset Management (BAM), JPMorgan Asset Management (JPM), and Rockpoint Group in making large investments in residential rental companies.

Rent Prices Rising

Investors are drawn to companies which buy and rent single-family homes because increasing home prices as well as upticks in rent make these investments more valuable. The rental market suffered as people left cities during the pandemic, but rents are climbing again, rising 1.1% year-over-year in March. Rents may increase further as a lack of inventory in the housing market forces potential buyers to continue renting.

The real estate market has been red-hot for over a year. While inventory is low, many Wall Street investors are betting there is still room for growth.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

TLS 1.2 Encrypted
Equal Housing Lender