Seeking Alpha

Blackstone's home rental bond could send more capital into rental housing

  • Many eyes will be on Blackstone's (BX +2%) upcoming sale of a bond backed by the rental stream from single-family homes owned by its Invitation Homes unit. The size of the offering is now expected at $479M and is supposed to be coming to market next week, reports the WSJ.
  • If successful (and why wouldn't it be amid a quest for any sort of yield), it looks to unlock a whole new wave of capital to be deployed into the sector, not just for Blackstone, but for single-family rental shops like American Homes 4 Rent (AMH +1%), Silver Bay (SBY -0.2%), American Residential Properties (ARPI +0.4%).
  • "We're rooting for them," says Richard Saltzman, CEO of Colony Capital (CLNY +1.1%), whose spin-off of its single-family rental unit - Colony American Homes - was dropped this summer amid the dive in REIT prices.
  • Back to the Blackstone offering ... There are 3,207 homes whose rents back the paper, with 1,365 of them in Phoenix, about 900 in three different CA cities, 325 in Atlanta, and 257 in Tampa. The ratings on the different tranches range from AAA to junk.
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