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Invitation Homes raises $1.54bn in IPO

The new real estate investment trust is the country's largest single-family homeowner.

Blackstone’s single-family rental platform is now trading on the New York Stock Exchange after raising $1.54 billion in its initial public offering.

Dallas-based Invitation Homes, founded by private equity giant Blackstone, priced its sale of 77 million shares of common stock at $20, according to a press release Tuesday. The real estate investment trust’s shares began trading on the New York Stock Exchange on Wednesday under the ticker symbol INVH.

In its filing with the Securities and Exchange Commission, Invitation Homes estimated its IPO stock price between $18 and $21 per share, PERE reported last week. Invitation Homes, founded in 2012, owns more than 48,000 homes and had $905 million in revenue for the 12 months ending September 30, according to an SEC filing last month.

The country’s largest single-family homeowner plans to use proceeds from the IPO to repay debts and “for general corporate purposes,” according to the SEC filing. The company also has a 30-day option to sell an additional 11.5 million shares if the offering's underwriters – which include Deutsche Bank Securities, JPMorgan, Bank of America, Merrill Lynch, Goldman Sachs and Wells Fargo Securities – sell more than 77 million shares of the company's common stock.

Invitation Homes' IPO follows other private equity-backed single-family rental businesses 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 real estate investment trust's third-quarter earnings report. The combined entity went public in January 2016.

Overall, single-family rental home REITs bounced back in 2016 after a slow start to the year, with the asset class up almost 27 percent over the year, according to the National Association of REITs.

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. Blackstone will continue to own a majority of the voting power among shares eligible to vote in the election of Invitation Homes' directors.

The firm managed $366.6 billion in assets overall as of December 31, including $101.9 billion in real estate.