Seeking Alpha

Blackstone slows home-buying binge

  • Blackstone's (BX) acquisition pace has slowed 70% from its peak last year when it was spending $100M per week on properties, says Jon Gray, the P-E firm's global head of real estate. After investing $8B to since April 2012 to buy 43K homes in 14 cities, Blackstone has narrowed most of its purchasing to Seattle, Atlanta, Miami, Orlando, and Tampa.
  • "The institutional wave has passed," says Gray.
  • American Homes 4 Rent (AMH) and Colony American Homes (CLNY, CAHS) have also slowed their purchase pace as bargains dry up. Now comes the difficult business of trying to manage massive stables of single family properties.
  • Gray, meanwhile, discounts the popular narrative of all this institutional buying driving prices higher, noting it represents a minor percentage of all purchases.
  • Not everyone is slowing down: "We've been ramping up acquisitions," Silver Bay Realty (SBY) CEO David Miller said in last week's earnings call (transcript).
Comments (3)
  • june1234
    , contributor
    Comments (3254) | Send Message
     
    Since 08 35 to 40% of home sales have been Blackstone group type investor driven. don't expect the first time home buyer to step up. According to the NAR that number dropped from 43 to 27% of mortgage apps in 13
    14 Mar 2014, 08:46 AM Reply Like
  • quabbin
    , contributor
    Comments (125) | Send Message
     
    june1234 I wonder what the occupancy rate is for those properties. Perhaps these slum lords are cutting back their purchase because they cant rent them out.
    14 Mar 2014, 12:43 PM Reply Like
  • jswede
    , contributor
    Comments (292) | Send Message
     
    AH4R was 56% rented out in August, and at that point had 20,000 homes ($3.4bil) and was still buying at a $100mil/mo clip.... since then they've cut a lot of staff and the CFO resigned in Feb.
    14 Mar 2014, 03:01 PM Reply Like
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