Blackstone Group LP has reportedly agreed to purchase a large multifamily residential portfolio from General Electric's financial arm for $2.7 billion. Blackstone will be acquiring about 80 apartment buildings from GE in an effort to maximize its presence in the U.S. residential property market, according to several media reports.
The housing portfolio includes around 30,000 condo apartments. The portfolio is scattered around areas like Atlanta, Dallas and other parts of Texas and the Southeast. GE is selling off the large chunk of assets in order to shrink its financial arm, reports Bloomberg. Not much is known about the deal as the transaction has still not been made public.
Experts believe that Blackstone's decision to invest in a large portfolio of multifamily homes would not prove to be very profitable as the segment is not in a very good shape. The sector was the most buoyant during the downturn as people's faith in buying a home faded away. However, now that the housing market and the single family home sector are rebounding, the fate of multi-family homes is hanging by a thread. They asserted that as soon as supply of single family homes get steady, demand for multi-family homes will eventually erode, reports the Wall Street Journal.
Though Blackstone did not comment on the speculations, it is clear that the company has full faith in the housing market. It is not sure what the firm plans on doing with its new acquisition. It might rent the apartments for a good price. Apparently, the company has opened 14 offices across the country to serve renting these new purchases, reports the New York Times.
The company hopes to take full advantage of the surging market. It has purchased more than 26,000 homes across nine U.S. states. More recently, the National Association of Home Builders released their report on improving housing markets in the country, which indicated steady growth in 70 percent of the states.
The fast pace of growth has induced concern among the bigwigs who feel that the market is advancing toward another bubble. However, others rubbish the doubts saying that the market still has a long way to go and is nowhere near a bubble.
