Wall Street Is My Landlord
Blackstone Group is pioneering a historic move to centralize the business of renting single-family homes in the U.S. after the housing crash left more than 7 million foreclosed homes in its wake. The investment firm has spent more than $7.8 billion purchasing about 41,000 single-family homes for rental conversion and sought more funds by issuing a bond backed by rental payments. Investors ranging from multi-billion dollar hedge funds to individuals buying as few as 10 properties have acquired more than 1 million homes in the past three years.
Published Dec. 20, 2013
Greater Phoenix Teeming with Investor-Landlords
Phoenix was one of the first U.S. cities to attract Wall Street-backed property investors who began buying homes to rent. Property values there fell 56 percent from June 2006 to August 2011, according to the S&P/Case-Shiller Index.
Each colored dot represents a home purchased by a large investor since 2009.
Source: Center for Real Estate Theory and Practice at Arizona State University's W.P. Carey School of Business
Small Town Attracts Big Money
Laveen, a Phoenix suburb of 35,000 people, has the highest density of institutional investors per household in Phoenix. About 600 homes were recently bought by institutional investors, 18 percent of which are owned by Blackstone.
Each colored dot represents a home purchased by a large investor since 2009.
Source: Center for Real Estate Theory and Practice at Arizona State University's W.P. Carey School of Business
Sending Rent to Wall Street
At least seven large institutional investors have purchased homes in this one subdivision in Laveen. Neighborhoods that were built for homeowners are being transformed into rental homes with landlords who live hundreds of miles away.
Each colored dot represents a home purchased by a large investor since 2009.
Source: Center for Real Estate Theory and Practice at Arizona State University's W.P. Carey School of Business
Money-Saving, Money-Making
Wall Street-backed firms bought properties at a fraction of the amount paid by the previous homeowner. In addition to rental income, landlords stood to profit as Phoenix home values increased 43 percent since September 2011, one of the biggest gains in the U.S.
Each colored dot represents a home purchased by a large investor since 2009.
Source: Center for Real Estate Theory and Practice at Arizona State University's W.P. Carey School of Business
REPORTED BY HEATHER PERLBERG & JOHN GITTELSOHN
GRAPHIC BY CHLOE WHITEAKER & DAVE MERRILL / BLOOMBERG VISUAL DATA