Invitation Homes, the Blackstone Group-owned single-family home rental business, raised $1.54 billion on Tuesday from its initial public offering, which was the largest IPO from a U.S.-listed company in over a year, according to The Wall Street Journal.
The Dallas-based real estate investment trust sold 77,000,000 shares of common stock at $20.00 each while maintaining its 70% stake in the offering. It is listed on the New York Stock Exchange as “INVH.”
- The pace of REIT public filings has slowed in recent years, with two in 2016 and 66 since 2007. Invitation Homes has spent roughly $10 billion since 2012 to snap up nearly 50,000 distressed homes and convert them into rentals.
Earlier this week, the company announced that it secured a $1 billion, 10-year loan from Fannie Mae and Wells Fargo to repay existing credit facilities and mortgage loans from two securitized bond offerings. Invitation Homes said previously that it intends to use the proceeds generated from the IPO to pay down some of its roughly $8 billion in debt.
Market participants note the moves by Invitation Homes highlight the underlying strength of the single-family rental market. The number of renters in the U.S. is expected to grow to 54.1 million in 2030 from 40.7 million in 2010, the Urban Institute forecast in June.
Meanwhile, buyers today face multiple obstacles to saving for a down payment — a key step on the path to ownership — including high rents, rising home prices and student debt. Those factors have combined to keep homeownership rates hovering near a half-century low this year.
For more housing news, sign up for our daily residential construction newsletter.