Blackstone sets up landlord lending arm

Private equity behemoth looks to cash in on $2.8 trillion single-family market
July 08, 2013 09:30AM

New-York based private equity giant Blackstone Group is upping its bet on the housing recovery with a program to lend to landlords, Bloomberg News reported.

Blackstone – which currently owns more rental homes than any other investor – has set up a subsidiary, B2R Finance LP, to offer loans of $10 million or more to landlords looking to grow their single-family rental portfolios, a source told Bloomberg News.

Blackstone has already spent $5 billion on more than 30,000 distressed homes across the country, but this latest move could help them benefit from smaller landlords who wish to tap into what Goldman Sachs estimated to be a $2.8 trillion market. Other large firms, such as Cerberus Capital Management, are also trying to get into the landlord lending game.

“This is the kind of thing that happens once — every once in a while, where you see something that’s a market-turning trend,” Blackstone CEO Stephen Schwarzman said during an October earnings call. “And we are loading the boat.” [Bloomberg News]Hiten Samtani