Wall Street businesses are more enthusiastic about buying family homes than ever before. They run the risk of killing their latest Golden Goose if they surge existing supplies rather than helping them build new homes.
Last week, Blackstone Real Estate Investment Trust purchased a portfolio of apartments from insurer American International Group for $ 5.1 billion. In June, the investment company spent $ 6 billion on the Home Partners of America, which owns more than 17,000 homes nationwide and offers lessors purchasing options. Bloomberg reported that private equity giant KKR has launched a new division to buy and rent homes.
Meanwhile, in Europe, real estate investors are increasing their share of the portfolio of investing in residential real estate, and German landlord Vonovia recently launched a € 18 billion acquisition of competitor Deutsche Wohnen. That’s $ 21.2 billion.
Rental housing is becoming a hot deal among large investors, but the trend is not new. Blackstone has made a lucrative bet on a home seized in the aftermath of the 2008-09 recession. And there is still no evidence that institutional investors are overwhelming the average homebuyer. According to Amherst Capital, they bought only one of the 500 US homes sold 12 months after the Covid-19 crisis began.
But now that the pandemic has made it more attractive to own a family home, the activity of large investors will increase. Rents collected from commercial real estate assets such as malls and offices were hit during the Covid-19 crisis, but most private housing tenants continued to pay. Family homes can be a better long-term bet than owning an e-commerce warehouse. Real estate research firm Green Street predicts that renting a US single-family home will generate 6.6% annual revenue. In contrast, the forecast for industrial real estate is 6.3%.
Real estate investors lie down in family homes
Source link Real estate investors lie down in family homes