Blackstone Real Estate Income Trust Acquires Home Partners Of America

Blackstone Real Estate Income Trust, Inc. (BREIT), a real estate investment platform managed by a subsidiary of Blackstone Group Inc BX, has announced its acquisition of Home Partners of America (HPA), valuing the company at $6 billion.

What Happened: The Chicago-headquartered HPA purchases and operates single-family rental homes. The company’s Lease Purchase Program enables tenants to rent the property for a year with the option of buying it from the company.

HPA launched the Lease Purchase Program in 2012 and currently maintains a portfolio of more than 17,000 homes.

In acquiring HPA, BREIT stated it would support the company’s efforts to expand access to high-quality housing for lower-income households through the Choice Lease program launched in 2019.

“The fundamental premise of the HPA platform is to provide residents with the opportunity to live in their chosen home with the option to purchase it,” said Jacob Werner, real estate senior managing director at Blackstone. “We intend to build on that goal and expand access to homes across the U.S.”

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Why It Happened: The housing market was one of the few economic sectors that was not damaged during the coronavirus pandemic. However, a severe imbalance between supply and demand resulted in home prices soaring as would-be buyers scrambled to acquire properties from an increasingly limited inventory.

According to new data from the real estate brokerage Redfin Corp RDFN covering the four-week period ending June 13, the median home-sale price reached $358,766, a 24% year-over-year increase to a record high.

Asking prices of newly listed homes were up 14% from the same time one year earlier, while pending home sales were up 26% year-over-year.

While prices soared, buying opportunities fell: Redfin reported a 35% year-over-year decline in active listings. As for the homes on the market, 56% that went under contract had an accepted offer within the first two weeks on the market, up from 43% one year earlier, and a record 54% of homes sold above list price, up from 26% over the same period in 2020.

Bill Young, co-founder and CEO of HPA, said the BREIT acquisition “will ensure we are well-positioned to expand the reach of our program to provide access to more homes while also delivering on our commitments to our current residents for the long-term. Our goal has always been to make homeownership a reality for more people, and now we can continue that mission, while providing even more flexibility and services for our residents.”

(Photo by Dan Moyle / Flickr Creative Commons.)