As residential real estate continues to sizzle, private equity firm Blackstone has agreed to buy Home Partners of America, a Chicago-based single-family home rental company, for $6 billion.
Blackstone Real Estate Income Trust announced the acquisition Tuesday, adding the Home Partners’ portfolio of more than 17,000 rental homes across the U.S., and its growing lease-to-buy platform toward homeownership.
“The fundamental premise of the HPA platform is to provide residents with the opportunity to live in their chosen home with the option to purchase it — we intend to build on that goal and expand access to homes across the U.S.,” Jacob Werner, senior managing director of New York-based Blackstone Real Estate, said in a news release.
Demand for single-family homes has been booming during the pandemic, with limited inventory pushing up the median existing-home price to more than $350,000 in May, up nearly 24% from the same month last year, according to the National Association of Realtors.
Home Partners offers an alternative path for first-time homeowners and others who might be priced out of the market, by leasing homes with the right to purchase in the future.
In 2012, with the home sales market still recovering from the Great Recession, Home Partners launched its lease-to-own platform in 22 markets. Bolstered by private equity investment, the company expanded to 40 markets by 2017. Home Partners has been based in the West Loop since 2019.
Privately held Home Partners says it has served more than 57,000 people in 74 metropolitan areas including Chicago, according to its website.
“This partnership with Blackstone Real Estate ... will ensure we are well-positioned to expand the reach of our program to provide access to more homes while also delivering on our commitments to our current residents for the long-term,” Bill Young, co-founder and CEO of Home Partners, said in the news release.
A January study by the Urban Institute expects home rentals to outpace home sales over the next two decades. Homeowner households are projected to grow from 80.2 million to 87.1 million by 2040, up 8.6%, while renter households are expected to grow from 43.7 million to 53 million, a 21.2% increase, according to the study.
The deal is expected to close in the third quarter of 2021. Home Partners will remain headquartered in Chicago, people familiar with the matter said Tuesday.