Blackstone to Spend $1 Billion Offering Tenants Reduced Rents
January 14, 2022 | Patrick Clark | Bloomberg News
Blackstone Inc. plans to spend $1 billion to acquire rental houses and lease them out at below-market rates, billing the program as a private-sector answer to soaring housing costs.
Home Partners of America, a single-family rental company that Blackstone bought last year, is offering the program, called Choice Lease. It will provide tenants who meet an income threshold a 10% discount on monthly rent payments and the option to purchase their homes at below-market rates.
The move comes as a U.S. housing shortage pushes rents and purchase prices higher. With many first-time buyers struggling to crack the market, politicians have raised concerns about the role Wall Street investors are playing in the housing market.
“The lack of housing supply is a national crisis,” Kathleen McCarthy, global co-head of Blackstone Real Estate, said in a statement. “We are proud to support Home Partners’ mission of addressing housing access and affordability while also providing underserved populations with a new path to homeownership.”
Home Partners, which Blackstone acquired last year through BREIT, its nontraded real estate investment trust, has a somewhat different business model than most single-family landlords. It buys a home on behalf of its client, who then rents it back on a series of one-year leases. At the end of each lease, the tenant can buy the house. The company owned 17,000 houses at the time Blackstone agreed to acquire it for $6 billion.
