Prices rising faster than expected, Blackstone Group LP, the largest private landowner in the United States , was quick to spend more than 2.5 billion U.S. to buy 16 000 single family homes for rent.
These acquisitions are in addition to those already made by the company and the value reaching U.S. $ 1 billion in October , when Blackstone spent U.S. $ 100 million per week for the purchase of homes, according to Stephen Schwarzman , its president .
"The market is moving much faster than anyone could have imagined ," said Jonathan Gray, global head of real estate, in an interview with Blackstone headquarters in New York.
New target markets
In the United States , Blackstone is the largest investor in single family rental homes , focusing its acquisitions in nine severely affected by the crisis markets , Atlanta to Phoenix, via Chicago , Las Vegas, Northern California and South , as well as Miami, Orlando and Tampa , Florida.
The company , along with Colony Capital LLC and Thomas Barrack Two Harbors Investment Corp. (SBY ) wishes to transform a sector dominated by small investors in a new class of institutional asset market , according to JP Morgan Chase & Co. ( JPM ) , could be worth 1.5 trillion U.S. .
The Gold Rush
The market, dominated until now by smallholders , could total 12 million homes and up to twice the size of the institutional multifamily market, according to a recent note by JP Morgan analysts led by Anthony Paolone . " A corporate structure around which include institutional capital is logical ," they explain.
Blackstone , which started last year 's round of acquisitions, trying to outrun the real estate recovery as price increases in the U.S. exceeded economists' forecasts , the regions most affected by the crash is being identified more quickly.
The S & P / Case- Shiller on property values in 20 U.S. cities index rose 4.3 % in the 12 months ending in October , the most impressive 12-month increase since May 2010, according to the group . Prices will increase by 3.3% in 2013 , after an estimated 4.5% increase last year, according to the median estimate of 15 economists surveyed property and analysts by Bloomberg News.
Blackstone makes its acquisitions through seized property and selling auction in which banks accept less than the mortgage amount owed to them , 5 million homeowners who lost their homes in the United States since the market peak in 2006.
Cash
Blackstone bought so quickly that it " stores " more than half of the acquired homes, the time to finalize the transaction and hire staff and contractors needed to renovate and rent, said Jonathan Gray. As he said , about 30 days are needed to get a home state and up to 30 days for rent.
Blackstone ultimately derive benefit from rising property prices. In the meantime, they generate income and cash flows, concluded Mr. Gray.
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