Blackstone Group LP, the world’s largest private-equity firm, added former AvalonBay Communities Inc. (AVB:US) Chairman Bryce Blair to the board of its Invitation Homes unit, the largest owner of single-family rental houses.
Blair, also the former chief executive officer of apartment landlord AvalonBay, where he worked for 20 years, “will be tremendously helpful as we develop our platform,” Invitation Homes Chairman and CEO Nick Gould said today in a statement.
Blackstone, based in New York, has spent more than $5 billion to buy at least 32,000 single-family rental homes as Wall Street-backed investors create a new real estate asset class from what has been a mom-and-pop business. Investors are slowing their purchases as home prices rise at their fastest pace since 2006 and they seek to demonstrate they can make money by managing scattered rental properties.
Blair was chairman of Arlington, Virginia-based AvalonBay, the largest apartment real estate investment trust by market value after Equity Residential (EQR:US), from 2002 until this May. He was AvalonBay’s CEO from 2001 to 2011.
Invitation Homes will be helped by Blair’s “background building a leading company in the multifamily space,” Gould said in today’s statement.
Private-equity firms, hedge funds and REITs have raised at least $18 billion to buy more than 100,000 homes in the past two years. They’re taking advantage of prices that fell as much as 35 percent from their 2006 peak and rising demand for rentals as the U.S. homeownership rate fell to its lowest rate since 1998. More than 7 million houses have been sold for a loss or seized in foreclosure proceedings since 2007, according to RealtyTrac.
Shares of single-family REITs American Homes 4 Rent (AMH:US), American Residential Properties Inc. (ARPI:US) and Silver Bay Realty Trust Corp. (SBY:US) are close to or below their initial offering prices.
Lenders have begun offering lines of credit to the biggest rental investors. Colony American Homes, the third-largest single-family investor, after Invitation Homes and American Homes 4 Rent, today announced a $500 million line of credit through JPMorgan Chase & Co. Invitation Homes has a $3.6 billion line of credit from a syndicate led by Deutsche Bank AG.
Before joining AvalonBay, Blair was a partner at Trammell Crow Residential, a real estate investment firm. He has been on the board of PulteGroup Inc. (PHM:US), the largest U.S. homebuilder by market value, since 2011, and has been chairman of the National Association of Real Estate Investment Trusts.
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