Tricon has apartment buildings in Toronto and about 38,000 rental homes in the U.S.
Author of the article:
Bloomberg News
Patrick Clark
Published Jan 19, 2024 • Last updated Jan 19, 2024 • 2 minute read
Blackstone Inc. is adding to its bet on rental housing with a US$3.5 billion deal for Tricon Residential Inc.
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Blackstone agreed to pay US$11.25 a share in cash for Tricon, a Toronto-based company that owns single-family rental homes and apartments, the companies said in a statement Friday. Blackstone Real Estate Partners X is teaming up with Blackstone Real Estate Income Trust for the deal.
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The move plunges Blackstone deeper into a single-family rental industry it helped create more than a decade ago, when it led a charge of Wall Street firms buying houses in the aftermath of the United States foreclosure crisis. The firm’s initial effort ended in 2019, when it sold off its shares in Invitation Homes, which it had previously taken public.
Blackstone didn’t stay out of the industry for long. The company led a preferred equity investment in Tricon in 2020. The next year, it agreed to buy Home Partners of America, a single-family landlord that offers clients a path to homeownership through rent-to-own contracts.
Tricon, led by former Goldman Sachs Group Inc. banker Gary Berman, has about 38,000 rental homes in the U.S., as well as apartment buildings in Toronto and land slated for development. Blackstone plans to complete US$3.5 billion of projects already in Tricon’s pipeline, and an additional US$1 billion in capital projects over the next few years.
“We are excited that our capital will propel Tricon’s efforts to add much-needed housing supply across the U.S. and in Toronto,” Nadeem Meghji, global co-head of Blackstone Real Estate, said in the statement.
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Tricon stock closed at US$8.63 on Thursday.
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The transaction, which is expected to close in the second quarter, comes as dealmaking shows signs of life following a sluggish 2023. Blackstone’s chief executive Steve Schwarzman said earlier this week that “animal spirits” are coming back to the market as more investors expect interest rates to come down.
BREIT will maintain its roughly 11 per cent ownership stake in Tricon after the deal closes and has agreed to vote its common stock in favour of the deal, according to the statement.
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