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Blackstone, Colony, Cerberus Increasingly Lend to Landlords

WASHINGTON DC 04.18.2017

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Chris Clemente -- Comstock Partners
Minh Le -- Gramercy District
Brian Cullen -- Keane Enterprises
Blackstone, Colony, Cerberus Increasingly Lend to Landlords

Private equity firms are lending to a growing number of relatively small investors looking to profit from the nascent housing market rebound. The loans from PE companies including Blackstone, Colony Capital and Cerberus Capital Management range from $500K to $50M and generally go to those investing in single-family homes crawling through the foreclosure process. Blackstone, Colony and Cerberus last year laid out a total $1.5B in landlord loans. And in the next few weeks those three firms will likely bundle the loans into bonds in a securitization underwritten by Deutsche Bank, the New York Times reported.

There's been a vacuum in the landlord loan market since the Great Recession, when many of the typical lenders left the field. Indeed, Freddie Mac and Fannie Mae are the only real competition for the dominant PE players, and those government loans are tough to obtain. There are just under 600K American homes currently in the foreclosure process, according to RealtyTrac.