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Invitation Homes, which recently made headlines after acquiring $1 billion in debt backing from Fannie Mae, raised $1.54 billion in its initial public offering on Tuesday.
The company announced it would price 77,000,000 shares of its common stock at $20 per share in a statement released Tuesday. Invitation Homes’s debut on the market is the largest by a U.S-based real estate investment trust since Paramount Group raised $2.29 billion in 2014.
Per the statement, Invitation Homes intends to use the net proceeds of the offering, together with borrowings under its anticipated new term loan facility, to repay existing indebtedness and to pay fees and expenses related to the offering.
Blackstone Group, the parent company of Invitation Homes, founded Invitation Homes in 2012. The company said in its S-11 form that it spent roughly $1.2 billion in renovating the homes in its portfolio, at an average of approximately $25,000 per home.
“Our portfolio benefits from high occupancy and low turnover rates, and we are well positioned to drive strong rent growth, attractive margins and predictable cash flows,” the company said.
The majority of Invitation Homes’ properties are located in the southeastern U.S., with almost 15 percent of their homes located in southern Florida. 12.4 percent of their homes are in southern California.
Fannie Mae’s decision to back Invitation Homes’ debt marked the first time a GSE agreed to guarantee the debt of an institutional owner of single-family houses.
“This transaction is a great opportunity to continue to serve the growing single-family rental market,” Pete Bakel, Financial and Executive Communications spokesman for Fannie Mae said on January 25. “Today, single-family homes account for more than 50 percent of the rental market, offering individuals and families access to good neighborhoods, schools, and employment centers. Invitation Homes is a strong partner with deep experience managing a large volume of single-family rental properties. This transaction helps us gather data and test the market to ensure we are delivering the right solutions that meet the increasing demand for single-family rental housing across all demographics.”
