Blackstone To Take Tricon Residential Private In $3.5 Billion Deal

Key Takeaways:

– Blackstone has agreed to take Tricon Residential private in a $3.5 billion deal.
– Tricon operates as a landlord and developer of single-family rental homes in the US and Canada.
– Tricon has a portfolio of approximately 38,000 single-family rental homes in the US Sun Belt and multifamily apartment buildings in the Toronto area.
– Blackstone plans to add much-needed housing supply across the US and in Toronto with its capital.
– Tricon owns single-family rentals in Atlanta, Charlotte, Dallas, Tampa, and Phoenix, and has development projects in progress.
– The deal comes as the US and Canada are facing a housing affordability crisis.
– Blackstone is the largest single-family landlord in America with over 300,000 rental properties in its portfolio.
– This is not Blackstone’s first venture into the single-family rental market.

inman:

Tricon is a landlord and developer of single-family rental homes in the United States and Canada with a portfolio of over 38,000 rentals.

The investment management company Blackstone made another big bet on rental housing on Friday with the announcement that it has agreed to take the Canadian real estate firm Tricon Residential private in a $3.5 billion deal.

Tricon operates as both a landlord and developer of single-family rental homes in the United States and Canada with a portfolio of approximately 38,000 single-family rental homes in the United States Sun Belt and multifamily apartment buildings in the Toronto area.

“Tricon provides access to high-quality housing, and we are fully committed to delivering an exceptional resident experience together,” said Nadeem Meghji, global co-head of Blackstone Real Estate. “We are excited that our capital will propel Tricon’s efforts to add much-needed housing supply across the U.S. and in Toronto, Canada.”

In the United States, Tricon owns single-family rentals in Atlanta, Charlotte, Dallas, Tampa and Phoenix. Its single-family rental development platform has approximately 2,500 houses currently under development. It also has land development projects that it projects can support nearly 21,000 single-family homes and a Canadian multifamily development platform that is currently building 5,500 market-rate and affordable multifamily apartment buildings.

Under its new ownership, the company plans to complete its $1 billion pipeline of development plans for new single-family homes, and enhance the quality of its existing single-family home portfolio through an additional $1 billion investment over the next several years, according to the announcement.

Blackstone shares our values and our unwavering commitment to resident satisfaction, and we look forward to benefitting from their expertise and capital as we partner in building thriving communities,” said Gary Berman, president and CEO of Tricon.

Blackstone will retain its 11 percent ownership stake in Tricon once the deal is finalized.

The deal comes as the United States and Canada are both facing a housing affordability crisis that has led to more people looking to rental housing instead of homeownership as mortgage rates remain at generational highs.

It’s far from Blackstone’s first foray into the single-family rental world. The New York City-headquartered asset management firm is the largest single-family landlord in America, with over 300,000 rental properties in its portfolio.

It was one of the first investment companies to purchase large swaths of homes in the wake of the subprime mortgage crisis, as large numbers of foreclosed homes were being sold off by lenders. It founded Invitation Homes in 2012, only to sell off its shares of that company in 2019.

The company then purchased the real estate company Home Partners of America in 2021 for $6 billion, scooping up 17,000 houses with it.

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Property Chomp's Take:

In a recent announcement, Blackstone, the investment management company, revealed its plan to acquire Tricon Residential in a $3.5 billion deal. Tricon is a Canadian real estate firm that operates as both a landlord and developer of single-family rental homes in the United States and Canada. With a portfolio of over 38,000 rentals, Tricon has a significant presence in the rental housing market.

The acquisition by Blackstone signifies its continued interest in the rental housing sector. Blackstone is already the largest single-family landlord in America, with over 300,000 rental properties in its portfolio. It was one of the first investment companies to recognize the potential of the rental market, purchasing foreclosed homes in the aftermath of the subprime mortgage crisis.

Under the new ownership, Tricon plans to complete its $1 billion pipeline of development plans for new single-family homes. It also aims to enhance the quality of its existing single-family home portfolio through an additional $1 billion investment over the next few years.

The deal comes at a time when both the United States and Canada are grappling with a housing affordability crisis. With mortgage rates remaining high, more people are turning to rental housing as an alternative to homeownership. This trend has increased the demand for rental properties, making the rental market an attractive investment opportunity for companies like Blackstone.

Nadeem Meghji, the global co-head of Blackstone Real Estate, expressed his excitement about the partnership with Tricon. He highlighted the importance of providing access to high-quality housing and stated that Blackstone's capital will help Tricon add much-needed housing supply across the United States and in Toronto, Canada.

Gary Berman, the president and CEO of Tricon, also expressed his enthusiasm for the collaboration with Blackstone. He emphasized their shared values and commitment to resident satisfaction and looked forward to benefiting from Blackstone's expertise and capital to build thriving communities.

Despite the acquisition, Blackstone will retain its 11 percent ownership stake in Tricon. This move further solidifies Blackstone's position in the rental housing market and highlights its long-term commitment to the industry.

Overall, the acquisition of Tricon by Blackstone demonstrates the continued growth and potential of the rental housing market. As more people choose to rent rather than buy homes, companies like Blackstone are seizing the opportunity to invest in rental properties. This acquisition will not only benefit Blackstone but also contribute to the expansion and improvement of Tricon's rental portfolio, ultimately providing more high-quality housing options for renters in the United States and Canada.

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