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Blackstone Funding Largest U.S. Single-Family Rentals

Steve Schwarzman’s Blackstone Group LP has spent $7.5 billion acquiring 40,000 houses in the past two years to create the largest single-family rental business in the U.S. The private-equity firm is now planning to sell bonds backed by lease payments, the latest step in turning a small business into a mature industry.

Deutsche Bank AG may start marketing almost $500 million of the securities as soon as this week, according to a person with knowledge of the transaction. The debt will include a portion with the highest investment grade from at least one ratings company, according to another person. Both asked not to be identified because the deal isn’t public.