Welcome to the neighborhood: Blackstone, Starwood merger to create nation’s biggest single-family landlord

Holdings include 9k homes in the Miami area and 8k in Southern California

TRD New York /
Aug.August 10, 2017 11:30 AM

Jonathan Gray and Barry Sternlicht (Credit: Getty Images)

Blackstone Group and Starwood Capital Group will merge their single-family rental businesses, creating a new landlord of 82,000 rental homes across 17 metro areas.

The deal is the largest for the single-family industry, the Wall Street Journal reported, since private equity investment in American homes shot up in the wake of the foreclosure crisis about a decade ago.

The new company will retain the name of Blackstone’s publicly-traded single family division, Invitation Homes, and will officially become the country’s largest single-family home owner, nearly two times larger than the closest competitor, Texas-based American Homes 4 Rent.

“This turned out to be a business,” Starwood chairman Barry Sternlicht told the Journal. “When we started out I think there were a lot of people who didn’t think it was a business. They thought it was a trade.”

Starwood previously merged its single-family business with Tom Barrack’s Colony Capital, creating Colony Starwood homes last year (the company changed the name to Starwood Waypoint after Barrack sold his stake).

The new Invitation Homes will be staffed with executives from both Blackstone and Starwood, and will include Sternlicht as well as Blackstone’e current head of real estate, Jonathan Gray. Holdings in the South Florida and Los Angeles areas account for a fair portion of Invitation Homes’ new portfolio, with more than 9,000 homes near Miami and 8,000 in the suburbs of Southern California.

Invitation Homes is at the vanguard of the single-family rental business’ rapid institutionalization. In January, Fannie Mae agreed to back $1 billion in Invitation Home’s single-family mortgage debt, an unprecedented transaction for the government-sponsored mortgage insurer. The move was criticized by the much of the home ownership lobby, particularly the National Association of Realtors, who saw the emerging industry as a threat to the market for home sales.

Invitation Homes held its initial public offering in January, raising more than $1.5 billion from investors.

President Trump recently appointed a veteran of the single-family rental business to be his top liaison to the Department of Housing and Urban Development. His choice for the senior post, Maren Kasper, was an executive at Roofstock, an online platform for single-family home investment. [WSJ]Will Parker

Related Articles

Keeping lawns freshly cut and outdoor spaces in tip-top shape could result in greater rewards for sellers. (Credit: iStock, IMDB)

Curb your enthusiasm: Homes with spruced-up outsides sell at premium

Elsa Segura (left) was arrested in connection to realtor Monique Baugh's (right) murder (Credit: iStock)

Second suspect charged in real estate agent’s abduction, murder

Clockwise from top left: John Gomes, Ronita Kalra, Eric Beniam and McKenzie Ryan (Credit: Getty Images, iStock, Wikipedia)

“We’re putting ourselves in situations where anything is possible”: Real estate agent’s killing rattles industry

As the years go by_A look back at 17 years of real estate history

A look back at 17 years of real estate history

Brookfield's largest-ever $15B property fund has invested in properties from New York (666 Fifth Avenue) to Bangalore (the Leela Palace hotel) (Credit: Brookfield, Getty Images, Leela)

Real estate fundraising hits lowest level since 2013

157 West 57th Street (Credit: iStock)

One57 condo with reduced ask tops a slow week of luxury contracts

Clockwise from top left: 730 Fifth Avenue, Unit #PH21; 730 Fifth Avenue, Unit #18A; The Pierre, Unit #3101; and The Park Imperial, Unit #64

Priciest homes listed last week include $60M pad at Crown Building

250th Issue

The Real Deal celebrates 250 issues