Two ren­tal-home giants plan to merge

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - — The New York Times

Two of the big­ger in­sti­tu­tional own­ers of single-fam­ily rentals in the United States are plan­ning to merge in the lat­est sign that af­ford­able hous­ing is be­com­ing harder to find as home prices re­cover in much of the United States.

In­vi­ta­tion Homes and Star­wood Way­point Homes on Thurs­day an­nounced a $4.3 bil­lion stock deal, which the com­pa­nies called a merger of equals. The merger would cre­ate a land­lord with about 82,000 homes in more than a dozen big mar­kets.

The deal comes nearly seven months af­ter In­vi­ta­tion Homes, which owns about 50,000 prop­er­ties, raised $1.5 bil­lion in an ini­tial pub­lic of­fer­ing.

In­vi­ta­tion Homes is ma­jor­ity owned by the Black­stone Group, one of the first pri­vate-eq­uity firms to be­gin buy­ing fore­closed homes in the af­ter­math of the 2008 fi­nan­cial cri­sis, then fix­ing them up and rent­ing them out. Black­stone is es­ti­mated to have spent $10 bil­lion on its fore­closed-hometo-ren­tal in­vest­ment.

Since the fi­nan­cial cri­sis, in­sti­tu­tional in­vestors such as hedge funds and in­vest­ment firms, as well as pri­vate-eq­uity firms, have bought an es­ti­mated 200,000 single-fam­ily homes to op­er­ate as rentals. There are about 17 mil­lion single-fam­ily rentals in the United States, most of which are owned by mom-and-pop land­lords. Be­fore the cri­sis, there were about 10 mil­lion.

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