Wall Street as Landlord: Blackstone Going Public with a $10 Billion Bet on Foreclosed Homes

Invitation Homes IPO will test investors’ interest in the idea that the rental-home business can be institutionalized as apartments were before

Wall Street Journal | December 6, 2016       Jonathan Gray of Blackstone Group LP went on the biggest homebuying spree in history after the U.S. foreclosure crisis, purchasing repossessed properties from the courthouse steps and through online auctions.

Four years, $10 billion and roughly 50,000 homes later, he will find out if his gambit will pay off. Invitation Homes LP, the Dallas-based company Blackstone formed to maintain and rent those homes, has filed confidentially for an initial public offering that could come as soon as January.

Though Blackstone is unlikely to sell much or even any of its stake in an IPO, the stock market debut will test investors’ interest in the idea that the rental-home business can be institutionalized as apartments, shopping centers and office towers were before.

Blackstone and others investors believed that the housing collapse presented a rare opportunity to acquire homes for less than it cost to build them. Millions of foreclosures created a market large enough to justify investing in large systems to manage and maintain sprawling portfolios of rental homes.   

Now, these new institutional landlords say the move toward rentals further supports their business model. They point to tight lending standards and a generation of renters who are outgrowing apartments but are too burdened by student debt to buy homes.  Read more here.

What’s Behind a Sudden Foreclosure Spike

CNBC | November 10, 2016     Foreclosures had been falling steadily to the lowest levels in nine years, but a curious spike in October may be the first sign of a crack in the recovery.

The number of properties with a foreclosure filing, which includes default notices, scheduled auctions and bank repossessions, jumped 27 percent in October compared with September, according to a new report from Attom Data Solutions. The volume is still down 8 percent from a year ago, but annual drops had been in the double digits all year, until now. Government-insured FHA loans are fueling much of the jump.

Foreclosures had been falling steadily to the lowest levels in nine years, but a curious spike in October may be the first sign of a crack in the recovery.

The number of properties with a foreclosure filing, which includes default notices, scheduled auctions and bank repossessions, jumped 27 percent in October compared with September, according to a new report from Attom Data Solutions. The volume is still down 8 percent from a year ago, but annual drops had been in the double digits all year, until now. Government-insured FHA loans are fueling much of the jump.

"While some states are still slogging through the remnants of the last housing crisis, the foreclosure activity increases in states such as Arizona, Colorado and Georgia are more heavily tied to loans originated since 2009 — after most of the risky lending fueling the last housing boom had stopped," said Daren Blomquist, senior vice president at Attom Data Solutions.

"The increase in October isn't enough evidence to indicate a new foreclosure crisis emerging in these states, but it certainly demonstrates that this housing recovery is not completely devoid of risk."  Read more here.

 

The 9 States That Got Walloped by Foreclosures in 2015

Business Insider | January 14, 2016   When it comes to foreclosures, there's good news and bad news.

The good news, according to real estate research firm RelatyTrac, is that foreclosure proceedings dropped 3% in 2015 to their lowest level since 2006.

Additionally, foreclosure starts were at a 10-year low.

The bad news is that foreclosures increased for 24 states and bank repossessions increased dramatically.

Based on RealtyTrac's data, we've compiled a list of the top 9 states for foreclosure activity. To qualify, states had to have more than 1% of homes in foreclosure.

Check out the full list below.  Read more here

Repossessions Spike 66% as Foreclosure Crisis Lingers

CNBC.com |  October 15, 2015    New foreclosures may be back to nearly normal, but the mess from the epic housing disaster in the last decade is far from gone. Bank repossessions, the final stage of the foreclosure process, jumped 66 percent year over year in the third quarter of this year, according to RealtyTrac, a foreclosure sales and analytics company.  Read more here