Blackstone plans to sell about $1.5 billion of stock in its single-family rental housing platform, Invitation Homes, through an initial public offering as soon as next month, according to media reports.
The IPO would value the future real estate investment trust at about $7.5 billion, according to the Wall Street Journal, which said the firm has filed confidentially for an IPO. Blackstone has long been expected to take the company public in 2016 or 2017. A spokeswoman for the New York-based alternative investment manager declined to comment.
In 2012, Blackstone founded Invitation Homes in the wake of the housing crash, eventually managing about 50,000 homes throughout the country. As recently as July, Blackstone president Tony James said the business, which is the largest US single-family homeowner, was still acquiring properties.
On Blackstone’s second-quarter earnings call, he said: “It's been a great investment, and we continue to be very optimistic about where home prices are in the cycle. I don't even think we are in mid-cycle yet… In terms of homebuilding and general activities, prices have come up a lot. As a result, we are still buying some homes but it's harder to buy in the volume that we once did, and so it's becoming a more mature investment in terms of rate of growth.”
Blackstone built Invitation Homes using capital from its seventh opportunistic vehicle, Blackstone Real Estate Partners VII, which closed on $13.3 billion in 2012, PERE previously reported. The fund had a 20 percent net internal rate of return as of September 30, according to the firm’s third-quarter earnings report.
Invitation Homes’ IPO follows earlier private equity-founded single-family rental businesses’ path to going public. Greenwich, Connecticut-based Starwood Capital Group and Los Angeles-based Colony Capital teamed up last year to merge their single-family rental platforms into Colony Starwood Homes, which is the country’s third-largest landlord, managing about 27,000 homes as of September 30, according to the REIT’s third-quarter earnings report. The combined entity went public in January.
A second REIT, American Homes 4 Rent, was founded in 2012 with funding including a $600 million investment from the Alaska Permanent Fund. The company held its IPO in August 2013 and managed about 45,000 properties as of September 30, according to its earnings report.
Blackstone managed $101.9 billion in real estate as of September 30.