Kon Novodvorsky’s Post

Blackstone's recent announcement to acquire AIR Communities for a whopping $10B is a game-changer for the multifamily market. This move, marking one of the boldest bets in the sector, suggests that we might be at a turning point, with Blackstone indicating a renewed confidence in multifamily assets. 🏘️💡 Not only does this deal signal a potential bottoming out of apartment values, inspiring other investors to re-enter the market, but it also represents a strategic expansion for Blackstone, adding 76 rental communities to their portfolio. Following a sluggish period in commercial real estate, this could very well be the spark that ignites increased activity and investment across the U.S. multifamily sector. 📈🔥 With the multifamily market experiencing a 61% drop in sales volume from 2022 to 2023 and a surge in new apartment units, the dynamics have been challenging. However, the tide may be turning. Reduced new apartment starts, significant dry powder waiting to be invested, and shifting demographics make multifamily an attractive proposition once again. 💼🌆 Blackstone's strategic move is a strong vote of confidence in the resilience and potential of the multifamily market. It's a call to action for investors sitting on the sidelines: the time to act is now. Let's watch this space as it evolves! https://lnkd.in/gXm_iJvf #RealEstate #MultifamilyInvestment #Blackstone #InvestmentTrends

When people ask me why now is the golden window to buy multifamily? Here are a couple of compelling reasons: · Supply-Demand Discrepancy: A significant disconnect exists between supply and demand, promising continued strong absorption and rental dynamics. · Homeownership Cost Barrier: With homeownership increasingly out of reach for many, there's a growing renter pool, further bolstering the rental market. · Bond Market Dynamics: While bond markets are relatively high (at least for this decade) pricing reflects this state. Anticipated interest rate cuts could tighten spreads, potentially boosting investment values. · Buyer's Market Advantage: Presently, it's a buyer's market, offering less competition and more unique opportunities. · Inflation Hedge: Commercial real estate remains as an attractive option for investors seeking to outpace inflation and build long-term wealth.   As noted by experts from Blackstone, investing during periods of uncertainty can yield immense upside. “You want to be investing into this dislocation because there's a lot of uncertainty. When that uncertainty passes, those investments begin to deliver accelerated return.” While deals may be challenging in today's market, the potential upside CRE is unprecedented. For those with a long-term outlook, there's arguably never been a more exciting time to enter the nipsey hussle marathon than today. https://lnkd.in/e6FfhsH4 #greysteel #cre #blackstone #realestate #multifamily #investing

WHY WON’T WALL STREET BUILD SFR? Just a few months ago, Blackstone paid $3.5B to purchase Tricon Residential, which owns 38,000 single-family rental homes across the Sun Belt and has a $1B development pipeline. That’s a strategy to control supply and pricing rent which Wall Street began shortly after the 2008 housing crisis. They have made billions from sucking all the equity from working families and minority neighborhoods. SFR should be owned by families, not Wall Street. Paying 25% premium for multifamily REIT with planned $400 million investment will require huge rental increases to justify investor interest. These increases will ripple to the SFR rentals too. Read below ⬇️ “With perfect hindsight into the 2008 housing collapse, it is clear that patient and flexible capital would have enabled many homeowners to hold onto their home equity. Entire neighborhoods would not have been devastated, and a generation of Black and Latino or Hispanic assets would not have washed out to sea.” -Brookings Institute ⬇️ The mission statement of Ellavoz.com is to keep #homeownership attainable for hard working American families in underserved communities. This is the opposite mission of most Wall Street real estate investment funds. If you believe in our mission, and #sharedvalues #impactinvesting please contact me personally to discuss joining our #impactangelnetwork.

🏘 🏦 The recent $3.5B acquisition of publicly traded SFR Tricon Residential by Blackstone highlights the growth and evolution of the SFR market from the early pioneers who were publicly listed including Silver Bay, American Residential, Starwood Waypoint / Colony American Homes, Front Yard Residential. Tricon Residential Blackstone ☀ ⏯ Despite the headlines, institutional investors only own around 1% of the entire Single Family Home market ⏯ 🌐 🏔 Facts. We recently came across an insightful research paper on Single Family REITs which found "we find no evidence that SFRs crowd out residential home-buyers or increase home prices, which is consistent with their low overall share of the housing stock but contrary to narratives in the popular press" Giacoletti, Marco and Heimer, Rawley and Li, Wenli and Yu, Edison G., Single Family REITs (November 2023) 🌎 🏔 👨 Tricon deal highlights: ✅ Announced: 1/19/2024 ✅ Value: $3.5B equity transaction ✅ Premium: 30% 1-day premium, 42% volume 90-day weighted avg share price ✅ Expected close: Q2'2024 ✅ ~38k US rental homes + apartments in Atlanta, Charlotte, Dallas, Tampa and Phoenix and Toronto ✅ ~2500 homes under development, support for 21,000 future development, $3.5B in pipeline to be completed 💯 SFR Thesis💯 🌟 Rental housing fundamentals remain strong. Record-low inventory of for-sale homes has meant more American families will rent for longer. And in areas with high sales prices, renting is often less expensive. Those trends aren’t likely to dissipate soon, according to Mizuho Securities analyst Haendel St. Juste. 🌟 🔊 “There’s been an underproduction of housing over the last decade and inventory remains tight,” said St. Juste. “For a family looking to get into a good school district, they can often get in cheaper by renting.” 🔊 🏦 “We are excited that our capital will propel Tricon’s efforts to add much-needed housing supply across the US and in Toronto,” Nadeem Meghji, global co-head of Blackstone Real Estate. Blackstone 🏦 https://lnkd.in/e5t7K89H #sfrevolution #housingthesis #pioneersandsettlers

Blackstone Goes Big: $10B Investment in Multifamily Housing! Blackstone is making waves in the multifamily market with its latest move. Acquiring AIR Communities for a whopping $10 billion, it's their biggest bet yet in the sector. 🏘️💸 This all-cash deal showcases Blackstone's confidence in the rental housing market, particularly in coastal hubs like Boston, Los Angeles, and Miami. And with a promise of a $400 million investment to enhance existing properties, they're not just stopping at acquisition - they're planning to further develop apartment living standards! Seems like Blackstone is strategically positioning itself for future success, especially with their capital backing and the anticipation of a slowdown in interest rate hikes. 📈💼 #MultifamilyInvestments #Multifamily

Blackstone's deal to acquire AIR Communities is priced 25% above AIR's stock price at the time of the announcement. But the valuation is closer to what apartment properties are actually trading for on the private market -- suggesting Blackstone is betting that the public markets are inefficiently pricing multifamily REITs. Whether that is true or not, we'll see, but apartments just haven't been trading at the values implied by REIT prices. One of my favorite commentators, CRE Analyst, published a post yesterday estimating an implied cap rate of 4.85%. That is by no means bargain bin discount shopping, but it is market reality. It's within the range of property-level trades for similar product -- high-quality assets in mostly high-quality markets. This is a good reminder that CRE and multifamily pricing indices based on stock prices are often poor gauges for real-world valuations. Stock prices can fluctuate for reasons that have nothing to do with the value of the underlying real estate assets. MSCI had a great chart last year showing valuations based on a repeat sales methodology were substantially higher than one using REIT stock prices. The deal also comes as no big surprise, given that Blackstone's Jon Gray has made headlines in recent months making the case that commercial real estate prices were bottoming and that now is a good time to buy. That's an increasingly accepted view in multifamily, where the consensus outlook now seems to be that multifamily is well-positioned for growth by 2025-26 after working through the multi-decade-high supply wave. It'll be interesting to see if this deal pulls other institutional buyers off the sidelines. I suspect it will. The AIR acquisition provides a good comp for apartment owners -- and a reminder to buyers that they aren't likely to see great real estate at greatly discounted prices. Bigger discounts are more likely to come in lower-tier assets in less-desirable locations. #multifamily #apartments #CRE https://lnkd.in/gCtiRm-B

JRK Holdings, like many apartment investors, went months over the past year without making any deals.  “We were very dormant from the second half of last year into the early part of this year,” JRK CEO Bobby Lee told Multifamily Dive. “It was very difficult to get anything done.” But then things flipped. Over the last 60 days, it may be hard to find a more aggressive buyer of single apartment properties than the Los Angeles–based real estate investment firm, which ranks as the No. 48 owner of apartments in the country. It closed three properties in August and September and has another $300 million or so in enterprise value in the pipeline with multiple East Coast deals. #investmentrealestate #investment #cre #apartments #multifamily

Blackstone's Back! In Sugi's 2024 outlook published last week, we highlighted that conditions were ripe for M&A in the REIT market. In a game-changing $3.5 billion deal, Blackstone Real Estate Partners X, together with BREIT, acquired Tricon Residential, publicly-traded owners of ~37,000 single-family rental homes in the U.S. Sun Belt and multifamily apartments in Canada. This strategic purchase at US$11.25 per share represents a 30% premium to last close, highlighting significant value in certain public REITs. We expect more to come as 2024 unfolds. #RealEstate #Acquisition #Blackstone #TriconResidential #MarketImpact https://lnkd.in/eZgrweAi

Blackstone's Multifamily Investment in AIR Communities: Seizing Opportunities 💼 Blackstone acquires upscale apartment owner AIR Communities (AIRC) for $10 billion, signaling a return to aggressive investments in real estate. Key Points: 🏢 Acquisition of AIR Communities includes 76 rental housing communities primarily in coastal markets. 💰 Blackstone plans to invest an additional $400 million to enhance the properties. 📈 Largest transaction in the multifamily market for Blackstone, showcasing bullishness on rental housing and commercial real estate. Investment Strategy: 🔍 Blackstone sees signs of real estate recovery and believes in seizing opportunities during uncertain times. 💡 Recent investments include acquiring a stake in a $17 billion loan portfolio and forming ventures in data centers and single-family rental homes. Transaction Details: 💲 Acquisition price of $39.12 per share, a 25% premium to AIR Communities' closing share price. 💼 Transaction valued at about $10 billion, including debt assumption, to be completed in the third quarter. Outlook: 🏘 Blackstone views multifamily and rental housing as promising segments despite challenges like new supply and higher interest rates. 📈 Markets in AIR Communities' portfolio show resilience compared to others, making it an attractive investment opportunity. Conclusion: 🔄 Blackstone's move reflects confidence in real estate markets and a strategic approach to capitalize on emerging opportunities in multifamily properties. https://lnkd.in/ge-Y3hax

Once again a housing market big dog: Blackstone According to Parcl Labs, once Blackstone completes its Tricon Residential acquisition, it will have the third-largest U.S. single-family portfolio (61,964 U.S. single-family homes), behind Progress Residential (83,502 single-family homes) and Invitation Homes (81,716 single-family homes). Most of that 61,964 U.S. single-family home portfolio comes from Tricon Residential (35,448 single-family homes), while the rest are held by Home Partners of America (26,516 single-family homes), according to Parcl Labs. NOTE... While a portfolio of 61,964 homes isn't small, in the grand scheme of the U.S. housing market, which has over 82 million single-family homes, it might not be as large as it initially sounds. On a national level, institutional home buyers—firms owning at least 1,000 homes—own around 1% of the total U.S. single-family stock, according to Parcl Labs. My latest for ResiClub https://lnkd.in/gRJm_xtd