BX Blackstone Inc

By Corrie Driebusch and Ryan Dezember 

Blackstone Group LP took a step toward cashing in its big bet on housing Tuesday.

The private-equity giant's Invitation Homes Inc. raised $1.54 billion in its initial public offering late Tuesday, according to two people familiar with the deal. The real-estate investment trust sold 77 million shares at $20 apiece in its IPO, according to the people, making it the largest U.S.-listed IPO in more than a year.

Invitation Homes is the end result of the biggest homebuying spree in history. Starting in 2012 with a home in Phoenix, Blackstone spent some $10 billion buying and fixing up homes to rent. For stretches, the firm spent $150 million a week on foreclosed homes, often buying them sight unseen.

The company now owns and rents 48,431 houses in 13 markets, from Seattle to south Florida, according to Invitation's offering document. Blackstone Group didn't plan to sell any of its roughly 70% stake in the IPO, the filing said, but the listing will enable it to begin cashing out of its investment in the future.

The IPO is also a test of investors' interest in the rental-home business.

Invitation is part of a broader bet on Wall Street that homeownership will remain out of reach for many Americans. Invitation will join its two largest rental-home rivals on the stock market. Shares of American Homes 4 Rent and Colony Starwood Homes debuted in recent years to tepid demand but surged last year as the homeownership rate fell to its lowest level in at least 50 years, according to U.S. Census Bureau data.

Homeownership has declined since the housing crisis amid stricter lending standards, mounting student debt and potential buyers whose savings and credit diminished during the recession.

But some investors have questioned whether the growth of Invitation and its rivals will be limited now that the foreclosure crisis is over and home prices in many markets have exceeded their 2006 highs.

Last week, Invitation won an important endorsement from Fannie Mae when the government-controlled mortgage-finance company said it would guarantee as much as $1 billion of the company's debt, a development that will likely mean cheaper borrowing costs for Invitation and potentially its rivals.

Invitation's stock offering also comes as the beleaguered U.S.-IPO market is showing signs of a resurgence. The company's deal value makes Invitation the largest IPO since First Data Corp. raised $2.8 billion in October 2015, according to Dealogic data. Invitation had planned to sell 77 million shares at $18 to $21 apiece, according to a regulatory filing.

Last year was the slowest year for IPOs since 2003 in terms of money raised, according to Dealogic. Through Monday night, U.S.-listed IPOs raised roughly $2.8 billion in January, Dealogic data show. Last year, there were no IPOs in the first month of the year.

Invitation will trade on the New York Stock Exchange under the ticker INVH, according to a regulatory filing. Deutsche Bank AG and J.P. Morgan Chase & Co. are leading the deal.

Write to Corrie Driebusch at corrie.driebusch@wsj.com and Ryan Dezember at ryan.dezember@wsj.com

(END) Dow Jones Newswires

January 31, 2017 19:10 ET (00:10 GMT)

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