According to an “insider” of Blackstone Group LP, the company’s $700 million sale preparation will carry on with Deutsche Bank AG, which will be tied to mortgage on rental properties.
The company’s sale preparation is followed by Deutsche Bank marketing the debt to its potential investors this very month. There will be an offering of 1/6 of the bonds, which are tied to rental homes. The rental properties include the largest $993 million sale in May, which is also managed by the largest U.S. landlord of single-family homes Blackstone. Despite the leak of the plans, the spokeswomen of both parties involved declined to comment, who are Denise Dunckel of Blackstone Invitation Homes and Amana Williams of Deutsche Bank.
Blackstone Group LP recently had an acquisition of the Cosmopolitan Resort amounting to $1.73 billion. Deutsche Bank is evidently having difficulty with the finances of the resort, which also caused the company to pay for $4 billion. As reported, the Deutsche Bank has an unfinished property last January 2008, costing $700 million, which made it emphasize the need to enter the field of assets trading. This is supported by Mr. Pius Sprenger, who declared the company wanting to benefit its shareholders by decreasing its non-core legacy positions through utilizing methods that will not affect the company’s capital negatively. Apparently, Blackstone helped Deutsche Bank survive the 2008 financial crisis, and now it is making a major step in casino investments. The reports showed that shares of Blackstone are growing having a change of +28.40%. The median for the group also represented a raise from 29.07 previous price to +30.72%.
Reports indicated that the step taken by Blackstone is a trend, which is also traced in other landlords’ plans as backed by Wall Street. The property owners look for debt market to gain a capital, which will allow them to add control to the properties they own while also increasing their revenue. Relatively, Morningstar Inc. is anticipating 10 deals this year in the market. Securities now allow for borrowing of less than 2% over the offered rate of the London Interbank. Even Silver Bay Realty Trust Corp. has declared this true for it is also planning to offer securitized loans. According to the presale report of Morningstar, the company will have a deal of $312.7 million in balance due of 3,089 properties. Other companies also placed down their plans for issuing securities, which may follow the Blackstone $700 million sale preparation very soon. The firms include Starwood Waypoint Residential Trust, American Residential Properties Inc., and Cerberus Capital Management LP among others.
Securitization has already been achieved by Blackstone by selling $479.1 of debt in November through its Invitation Homes LP unit. Wall Street also provided $3 billion worth of securities for Colony American Homes Inc., American Homes 4 Rent, and Blackstone since the previous year. Evidently, Blackstone $700 million sale preparation along with other landholders’ actions show that the real estate and private firms are looking for ways to build rental business amidst the foreclosure crisis in the United States. Convincingly, aside from Blackstone $700 million sale preparation, the bonds market relating to rental properties may outperform $30 billion in a year, said Keefe, Bruyette & Woods Inc.’s analyst Jade Rahmani.