Blackstone enters deal to buy Home Partners of America for $6 billion

The transaction is expected to close in the third quarter, subject to customary closing conditions and approvals

Blackstone Real Estate Income Trust has entered into an agreement to acquire Home Partners of America (HPA). The deal values HPA, which owns a portfolio of over 17,000 single-family homes that are offered to tenants to rent and eventually purchase, at $6 billion

EXISTING-HOME SALES FALL FOR FOURTH STRAIGHT MONTH

"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," Blackstone Real Estate Senior Managing Director Jacob Werner said in a statement. "We intend to build on that goal and expand access to homes across the U.S. We look forward to working with HPA’s leadership team to further invest in the properties and continue its role as a valuable resource for people considering home purchases."

HPA co-founder and CEO Bill Young added that the partnership will position the company 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." 

"Our goal has always been to make homeownership a reality for more people, and now we can continue that mission, while providing even more flexibility and services for our residents," Young added. 

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The transaction is expected to close in third quarter, subject to customary closing conditions and approvals, according to the companies. 

Goldman Sachs & Co. LLC acted as financial advisor and Sidley Austin LLP and Fried, Frank, Harris, Shriver & Jacobson LLP acted as legal counsel to HPA. Bank of America Securities and Wells Fargo Securities acted as financial advisors to Blackstone and Simpson Thatcher & Bartlett LLP acted as its legal counsel.   

Ticker Security Last Change Change %
BX BLACKSTONE GROUP 114.21 +0.92 +0.81%

Shares of Blackstone rose nearly 1% during Tuesday's trading session on the announcement.   

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The move comes as existing home sales fell for the fourth straight month in May. The number of contracts closed slipped 0.9% in May to a seasonally adjusted annual rate of 5.8 million from 5.85 million in April, according to the National Association of Realtors. The decline in contracts closed in May came as the median existing-home price surged by a record 23.6% year-over-year to $350,300. Prices have posted 111 straight months of year-over-year gains since March 2011.  

Total housing inventory at the end of May was 1.23 million units, up 7% from April. Still, that was 20.6% below the 1.55 million homes available a year ago. Unsold inventory ticked up to 2.5 months, but remained far below the 4.6-month supply that was seen in May 2020. Homes remained on the market for an average of 17 days in May, unchanged from April but down 34% year over year. 

Meanwhile, a new report by Realtor.com found that home rental prices, which plunged following the spread of the COVID-19 pandemic, have risen about 7.5% nationwide to their highest level in two years as of May 2021. The median national rent reached $1,527 in May, up 5.5% compared to a year ago, according to Realtor.com. May's median rent increased in 43 of the 50 largest metro areas, compared to the same period a year ago, a slight increase from 40 metro areas in April and 33 in March. 

FOX Business' Jonathan Garber and Daniella Genovese contributed to this report