Blackstone buys major landlord Tricon for $3.5B 

Why BREIT is betting on single-family rentals in 2024

Blackstone Deepens SFR Play With $3.5B Tricon Acquisition
Tricon Residential's Gary Berman and Blackstone's Stephen Schwarzman (Tricon Residential, Getty)

Blackstone is banking on bright days ahead for the single-family rental sector, agreeing to acquire major landlord Tricon Residential for $3.5 billion.

Blackstone will pay $11.25 per share for the Toronto-based company, Bloomberg reported, a premium on the stock’s Thursday closing price of $8.63. Blackstone Real Estate Partners X and Blackstone Real Estate Income Trust are partnering on the acquisition.

BREIT is maintaining an 11 percent ownership stake in Tricon following the deal’s closing, which is expected to come in the second quarter. Four years ago, Blackstone led a preferred equity investment in Tricon.

Led by former Goldman Sachs banker Gary Berman, Tricon holds a portfolio of roughly 38,000 single-family rental homes nationwide. The company also owns apartment buildings in Toronto and some land expected to be developed.

Blackstone plans on completing $3.5 billion worth of projects Tricon already has in the pipeline. It will also work on $1 billion worth of capital projects in the coming years.

Tricon is one of the major single-family rental landlords taking advantage of the sector’s resilience, as single-family rents have proven to be more solidified than apartment rents in recent months. In the third quarter, Tricon posted rent increases above 6 percent year-over-year, something Berman directly tied to the housing market.

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Blackstone has been a critical backer of single-family rental efforts for the last decade. 

After selling off its shares in Invitation Homes in 2019, post-pandemic trends beckoned Blackstone back into the sector. In June 2021, the investment giant made a $6 billion bet on Home Partners of America, buying a portfolio of 17,000 properties. Blackstone was likely anticipating a boom on rent-to-own demand, as housing affordability decreased across the country.

Two years ago, Blackstone planned to spend $1 billion to expand its affordable single-family rental offerings, looking to invest those funds in roughly 4,000 properties in a two-year period. Run by Home Partners, the Choice Lease program was designed for households earning 80 percent or less of their area’s median income; the program offers participants a 10 percent reduction on their monthly rent.

The program could help Home Partners scale its offerings to those who couldn’t previously afford to rent from the company.

Holden Walter-Warner

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