Why Blackstone Is Buying Homes In The U.S. Again

Brief Summary

This video explores Blackstone's significant role as one of the largest landlords in the United States, focusing on its investments in multifamily housing, single-family rentals, and affordable housing initiatives. It examines the company's strategies, including property improvements and acquisitions, as well as the potential impact of rent control policies and housing market dynamics on its business model. The video also touches on Blackstone's financial structure, investment strategies through private placements like BREIT, and its historical involvement in the real estate market.

• Blackstone is a major player in the rental housing market, owning or having interests in over 274,000 units.
• The company focuses on property improvements and acquisitions to increase value and rental income.
• Rent control policies and housing market dynamics pose potential risks and opportunities for Blackstone's investments.

Introduction

Blackstone, a financial firm managing over $1 trillion in assets, operates significantly in real estate, making it a major landlord in the U.S. with interests in at least 274,000 rental units, primarily in the Sunbelt regions. While owning less than 1% of available housing in each market, Blackstone focuses on multifamily and residential housing, avoiding struggling retail sectors. Rising rents in cities with limited housing construction have led to considerations of rent control policies, potentially affecting Blackstone's financial performance.

Chapter 1: Multifamily housing

Blackstone's multifamily housing investments include properties like Stuyvesant Town Peter Cooper Village, acquired in 2015, which consists of 11,242 rent-stabilized units housing approximately 30,000 residents. While long-term tenants benefit from lower rents, market rates have significantly increased over the years. A 2020 lawsuit by tenants against Blackstone's subsidiary, alleging plans to convert units to market rates, was decided in favor of the tenants by the New York State Supreme Court. Blackstone has invested $425 million in Stuy Town, improving apartments and adding bedrooms, but has faced criticism regarding property management responsiveness.

Chapter 2: Private placements

Blackstone generates revenue through management and performance fees from its various funds, outperforming the broader market over the past five years. Founded in 1985 by Peter Peterson and Stephen Schwarzman, Blackstone has evolved from leveraged buyouts to diversified private equity, investing in real estate assets through private placements available to accredited investors. Blackstone's Real Estate Income Trust (BREIT) holds significant interests in industrial developments, data centers, and rental housing. Despite a slowdown in new investments since 2022, BREIT received a notable $4 billion investment from the University of California.

Chapter 3: Single-family rentals

Blackstone was an early entrant into the single-family rental market, initially becoming the largest owner of single-family homes after the financial crisis and later exiting by taking Invitation Homes public. Re-entering the market in 2021 with the acquisition of Home Partners of America, Blackstone later shuttered the lease-to-purchase program. Currently, Blackstone is expanding its single-family rental portfolio with Tricon Residential, acquired in 2024, and now holds approximately 58,000 properties, with plans to build thousands of new homes across the U.S.

Chapter 4: Policy

Declining new housing permits and construction starts may lead to increased market rate rents, particularly in cities like New York. Policymakers are increasing spending on low-income housing, benefiting Blackstone's affordable housing initiative, April Housing, which started with 70,000 government-subsidized units. Blackstone aims to become the largest provider of affordable housing in the U.S. by preserving and extending affordability through tax credit syndications and new construction. The company emphasizes its ability to maintain consistent quality in rental housing and contribute to new supply through equity investments.