Invitation Homes Investor Deck Reveals $ 1 Billion Expansion Plans
- The institutional single-family rental market is growing rapidly in 2021, even as criticism for evictions and overbidding by other homebuyers add up.
- Invitation Homes, the largest operator, told investors in March that it planned to spend $ 1 billion to acquire homes this year.
- We posted the latest Investor Presentation from Invitation Homes to provide an overview of the company’s expansion plans.
- See more stories on the Insider business page.
The hot market for single-family homes in the United States has made them a great time to sell and difficult to buy, as near-record mortgage rates and the exodus of residents from cities to the suburbs during the pandemic drastically boosted demand for homes. and the shortage of supply. .
Among the winners in America’s growing obsession with buying homes are the large state-owned single-family rental companies, or SFRs, such as Invitation Homes and American Homes 4 Rent, which have, over the past decade, been accumulated portfolios of tens of thousands of homes. The companies achieved record investment activity last year and are poised to make even more acquisitions in 2021.
Despite rising prices and intense competition for homes, businesses have been able to outsmart everyday homebuyers by paying cash for homes and closing deals faster. Businesses see current market conditions as a good time to leap, as more potential buyers are sidelined by rising home values and expected mortgage interest rates to rise. , forcing many to rent instead.
Institutional investors now own just over 1% of all residential real estate in the United States, according to an industrial group.
Invitation Homes, the largest public rental operator for single-family homes with a market capitalization of around $ 20 billion, is on its way to becoming the number one beneficiary and buyer of new homes in the SFR sector. Founded by alternative investment giant, the Blackstone Group, in the aftermath of the great financial crisis nearly ten years ago and listed on the stock exchange in 2017, the company is forecasting its record year of acquisitions, according to an investor presentation which she released in March this year.
The company plans to spend more than $ 1 billion on home purchases this year. The company says it is investing capital to renovate homes that would otherwise remain neglected and is giving tenants a chance to live in a home they may not be able to afford.
An insider survey found that Invitation Homes and other institutional investors are also pushing average homebuyers out of some of the country’s most competitive housing markets, squeezing billions from Wall Street as another hurdle in the already daunting task of realizing the American dream of homeownership.
A spokesperson for Invitation Homes told Insider the company “has bought less than two-tenths of 1% of all homes sold on multiple listing services in the 16 markets we operate in,” and dismissed it. idea that she consistently beat the top. conventional home buyers. Some of Invitation Home’s largest markets are Southern California, Atlanta, Phoenix, and South Florida.
A Reuters survey found that Invitation Homes and other business owners, both single and multi-family, evicted tenants during the pandemic, even though the CDC implemented a conditional eviction ban. A spokesperson for Invitation Homes told Reuters the company plans to use its “legal rights” to challenge CDC tenants’ statements to obtain an eviction order after “exhausting all other options.”
While the company may have faced public criticism, it has had no problem raising or deploying funds. Take a look at the most recent company presentation to investors below (some slides have been removed and do not contain relevant information).