The Real Deal New York

Blackstone Group to dial back rental buying binge

Acquisition pace slows by 70%; "institutional wave has passed"

March 14, 2014 08:05AM

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Jonathan Gray

Blackstone Group is preparing to hit the brakes on buying homes to rent as its acquisition pace has already plummeted by 70 percent from the private equity firm’s peak last year.

The firm had been on a tear, snatching up enough properties to render it the largest single-family home landlord in the U.S. — ahead of American Homes 4 Rent and Colony American Homes. Blackstone spent $8 billion to purchase 43,000 houses across 14 cities over the last two years. At one point last year, it was investing at least $100 million per week. But the sky-high prices have led Blackstone to take a step back.

“The institutional wave has passed,” Jonathan Gray, Blackstone’s global chief, told Bloomberg News. “It’s at a much lower level than it was 12 or 24 months ago.”

Gray said last month the firm plans to invest more in international markets such as China, India and Brazil, as previously reported. [Bloomberg News]Mark Maurer

  • RENEWYORK

    The funny thing is, these hedge funds are the cause the inflated market and now they are backing out. In florida hedge fund companies were not even looking at the homes they were just buying and biddng way hire then any home buyer because of such little return they require off of a property. They are the cause of South Florida increase in property, which people think “yea great properties are rising,” but what they do not understand is that properties are not rising because economy which is what real estate should be ran on, they are rising because these retarded hedge funds are bidding up everything from the real home buyers. So banks are raising the shortsales higher and are connected to these guys mean while when a primary home buyer wants to purchase a home it is to late because the hedge fund companies raised the price to a saturated value. I hope these hedge funds all burn with the banks that are as corrupt and wrong as they are

    • EasyCreditKills

      You’re completely wrong about the cause of the last real estate boom. It was the perpetually low interest rate environment, coupled with the moral hazard brought on by Fannie and Freddie, FDIC, FHA, etc.. If you want to point fingers, point them directly at government and the mysterious and absurd Federal Reserve, which has destroyed our currency and created distortions in the market not yet fully realized. Your entire thesis is faulty and based on zero scientific research. Look up Hayek on Google and learn.

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