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25
BLACKSTONE'S
BET PAYS
OFF WITH
INVITATION
HOMES IPO
Invitation Homes, which recently
made headlines after acquiring $1 billion
in debt backing from Fannie Mae, raised
$1.54 billion in its initial public offering last
month.
e company announced it would price
77,000,000 shares of its common stock at $20
per share in a statement released on January
31. Invitation Homes' debut on the market
is the largest by a U.S-based real estate
investment trust since Paramount Group
raised $2.29 billion in 2014.
Per the statement, Invitation Homes
intends to use the net proceeds of the
offering, together with borrowings under its
anticipated new term loan facility, to repay
existing indebtedness and to pay fees and
expenses related to the offering.
Blackstone Group, the parent company
of Invitation Homes, founded Invitation
Homes in 2012. e company said in its S-11
form that it spent roughly $1.2 billion in
renovating the homes in its portfolio, at an
average of approximately $25,000 per home.
"Our portfolio benefits from high
occupancy and low turnover rates, and we
are well positioned to drive strong rent
growth, attractive margins and predictable
cash flows," the company said.
e majority of Invitation Homes'
properties are located in the southeastern
U.S., with almost 15 percent of their homes
located in southern Florida. 12.4 percent of
their homes are in southern California.
Fannie Mae's decision to back Invitation
Homes' debt marked the first time a
GSE agreed to guarantee the debt of an
institutional owner of single-family houses.
"is transaction is a great opportunity
to continue to serve the growing single-
family rental market," Pete Bakel, Financial
and Executive Communications spokesman
for Fannie Mae said on January 25. "Today,
single-family homes account for more than
50 percent of the rental market, offering
individuals and families access to good
neighborhoods, schools, and employment
centers. Invitation Homes is a strong partner
with deep experience managing a large
volume of single-family rental properties.
is transaction helps us gather data and
test the market to ensure we are delivering
the right solutions that meet the increasing
demand for single-family rental housing
across all demographics."
