Invitation Homes IPO Raises $1.54 Billion

Blackstone Group LP’s massive bet on the single family rental home market seems to have paid off with the initial public offering (IPO) of it’s Invitation Homes Inc. on January 31, 2017. From the Wall Street Journal:

The private-equity giant’s Invitation Homes Inc. raised $1.54 billion in its initial public offering late Tuesday, according to two people familiar with the deal. The real-estate investment trust sold 77 million shares at $20 apiece in its IPO, according to the people, making it the largest U.S.-listed IPO in more than a year.

Invitation Homes is the end result of the biggest homebuying spree in history. Starting in 2012 with a home in Phoenix, Blackstone spent some $10 billion buying and fixing up homes to rent. For stretches, the firm spent $150 million a week on foreclosed homes, often buying them sight unseen.

The company now owns and rents 48,431 houses in 13 markets, from Seattle to south Florida, according to Invitation’s offering document. Blackstone Group didn’t plan to sell any of its roughly 70% stake in the IPO, the filing said, but the listing will enable it to begin cashing out of its investment in the future.

Now the question is this: will the US housing market continue to lean towards renting? If so, that could be a rising tide of rental housing that’s good for the continued health of the apartment industry too.