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Invitation Homes sets IPO parameters

Blackstone’s single-family rental platform has priced the shares of its 77m shares of common stock.

Invitation Homes, the country's largest owner of single-family rental homes, has edged closer to its initial public offering with a Monday filing that set the terms for the offering.

In the filing with the Securities and Exchange Commission, Invitation Homes estimated its IPO stock price between $18 and $21 per share. The Dallas-based company plans to sell 77 million shares of common stock in its IPO and operate as a real estate investment trust. It will trade under the ticker symbol “INVH” on the New York Stock Exchange.

“I think this offering is going to be a blow-out in terms of supply and demand,” an executive familiar with the matter told PERE earlier this month. The executive said he expects the company to go public the week of January 30.

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 earlier this month. A spokeswoman for Blackstone declined to comment.

Invitation Homes plans to use proceeds from the IPO to repay debts and “for general corporate purposes,” according to the SEC filing. The company also has the 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' anticipated 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. After the IPO is completed, 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 $361 billion in assets overall as of September 30, including $101.9 billion in real estate.