In the aftermath of the financial crisis, Blackstone has steadily shelled out billions to acquire and fix up foreclosed homes across the US. Now, in a major step toward liquidity, the company that manages Blackstone’s real estate portfolio has set terms for an IPO that could value the business at nearly $12 billion.

Blackstone

Blackstone

Scheduled to list on the NYSE under the ticker symbol INVH, Invitation Homes has revealed plans to sell 77 million shares for between $18 and $21 apiece in an upcoming public offering. A midpoint pricing would raise about $1.5 billion, resulting in a fully diluted market value of $5.9 billion and an enterprise value of $11.8 billion, according to Renaissance Capital. The company, which is incorporated as an REIT, should officially price the offering next week.

The company’s portfolio includes more than 48,000 homes in 13 markets, with 72% of revenues coming from the western US and Florida. The largest chunk of its portfolio—more than 7,500 homes—is in the Atlanta area, with South Florida, Tampa and Southern California also accounting for substantial portions. Invitation claims to have invested $1.2 billion in post-acquisition renovations to its homes.

The business was formed in 2012 to take advantage of what Blackstone saw as an inefficiency in the market: an absence of available debt that would make it difficult for prospective renters to borrow. Invitation particularly targets markets where there’s an absence of new housing and stronger-than-average growth in jobs and household formation.

Read more of our IPO coverage here.

Article by Kevin Dowd – PitchBook