Tricon Capital Group* (TCN : TSX : $6.70) Jan10/13
Net Change: 0.01, % Change: 0.15%, Volume: 85,027 Blackstone Group (BX : NYSE : US$16.70)Net Change: 0.02, % Change: 0.12%, Volume: 2,246,580 In Good Company. According to Bloomberg, the Blackstone Group, the largest U.S. private real estate owner, accelerated purchases of single family homes as prices jumped faster than it expected. Jonathan Gray, global head of real estate at Blackstone says they have spent more than $2.5 billion on 16,000 homes, that's up from $1 billion of homes owned in October, when Blackstone said the company was spending $100 million a week on houses. Gray said the market is moving much faster than anybody thought possible. Blackstone focuses its buying on Atlanta, Chicago, Las Vegas, Phoenix, Northern and Southern California; Miami, Orlando and Tampa, Florida. Separately, last week, Tricon announced it had completed a significant portfolio acquisition of 550 single family rental homes, growing its portfolio to more than 1,500 homes in the U.S. With a target of acquiring 3,000 rental homes, Tricon is now halfway to its goal after commencing this strategy less than one year ago. Canaccord Genuity Real Estate Analyst Jenny Ma notes that this portfolio acquisition is unique from Tricon's typical approach in investing in single family homes, and is reflected in the comparatively favourable metrics of the Charlotte portfolio. Specifically, the going-in cap rate of 12.5% for the Tricon's Charlotte portfolio is better than the ~8-9% Tricon typically aims for, and portfolio occupancy of 95% is exceptionally high considering that Tricon has typically been buying vacant homes with the view of renovating them before leasing them out.