Blackstone To Pay $6B For Single-Family Rent-To-Own Company
Blackstone Real Estate Income Trust has inked a $6B deal to acquire Home Partners of America, which owns and manages single-family rental houses. Chicago-based Home Partners owns more than 17,000 houses in the United States.
Home Partners acquires single-family houses and leases them to residents who, under an agreement with Home Partners, can establish the right to purchase their homes within three to five years. Households that participate in the option to buy must have an annual income of $45K, have members who are employed, and have no history of eviction or pending bankruptcy.
Under Home Partners' leasing agreements, monthly rent payments aren't applied to the later purchase price of the properties. Residents who decide to exercise their right to purchase are obligated to pay the full predetermined price and provide their own financing to do so.
"The fundamental premise of the Home Partners platform is to provide residents with the opportunity to live in their chosen home with the option to purchase it," Blackstone Real Estate Senior Managing Director Jacob Werner said in a statement. "We intend to build on that goal and expand access to homes across the U.S."
The single-family home rental business, once a niche mostly relegated to owners of a few properties, has captured the interest of major investors such as Blackstone. In the wake of the Great Recession, Blackstone purchased houses at distressed prices and rented them out through Invitation Homes.
In 2019, Blackstone sold its interest in Invitation Homes for a considerable profit, but in 2020, the company returned to the sector when it spent $300M for an equity stake in Toronto-based single-family rental firm Tricon Residential.
About 6% of new single-family homes are developed specifically to be rented. At that rate of development, about 700,000 new single-family housing units for rent will be developed over the next 10 years.
The acquisition of the 560-hotel, 62,257-key portfolio will be through $4.65B in CMBS debt that will soon hit the market, Commercial Observer reports. Extended Stay’s shareholders approved the acquisition earlier this month at $20.50 per share.