A private equity firm that purchased tens of thousands of distressed properties following the housing collapse is raising its wager on the housing market by lending to other “buy-to-let” investors, according to a report.
Blackstone Group, one of the world’s largest private equity firms, bought more than 30,000 distressed homes over the last few years with a buy-to-rent strategy - buying homes on the cheap and then renting them out for long-term steady income.. Now, it’s making an even bigger bet on those investments by lending to other investors who will do the same thing, according to a report by Bloomberg Monday.
The firm formed B2R Finance LP, a lending arm that stand for “buy-to-rent”, will lend loans starting at US 10m to investors who want to buy and rent portfolios of distressed properties, the report said.
Blackstone is said to be filling a gap that is present for medium-sized investors who are typically not able to obtain loans or credit facilities to buy distressed property portfolios, the report added.
Institutional investors purchased nearly 100,000 homes worth about US 17bn since the housing market collapsed in mostly buy-to-rent strategies, the report added.
The move to start lending on the homes purchased is a signal that the housing market has improved and PE firms are willing to risk more to see returns on investment.