‘Swapping homes like stocks’: Wall Street-backed firm buys 264 valley homes in a day
By Patrick Blennerhassett and Jimmy Romo
January 4, 2024
The deal includes single-family homes all over the Las Vegas Valley and is part of a much larger transaction for the corporate landlord.
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A Wall Street-backed corporate landlord bought hundreds of Clark County homes in a staggering one-off residential sale in summer 2023.
Miami-based investment firm Starwood Capital Group sold 264 homes in Clark County for $98 million to Dallas-based Invitation Homes (NYSE: INVH), according to Clark County property records.
The deal, made in three separate transactions, closed on July 18, property records show. The largest sale was $57.5 million for 155 homes, the second was $26.3 million for 70 homes and the third was $14.1 million for 39.
The majority of the homes sold are in the city of Las Vegas (94), followed by the city of North Las Vegas with 77. The price range for each home ranged from around $292,000 to $694,000, with the average price at $371,514.
The sale is part of a much larger deal between Starwood Capital and Invitation Homes, a $650 million swap for a portfolio of close to 1,900 single-family rental homes, with the vast majority being in the Sun Belt, including in Texas, Florida, Phoenix, Las Vegas and Los Angeles.
Wall Street-backed hedge funds, corporate landlords and cash rich investors have been buying up single-family homes across the country as far back as 2009, which experts say means fewer houses on the market for families to purchase. That also could lead to higher rental prices and fewer affordable homes in regions like the Las Vegas Valley. A MetLife Investment Management study shows these companies could own close to 40 percent of all U.S. houses by 2030.
Concerning the $98 million sale, an Invitation Homes representative said the purchase was part of a “larger portfolio acquisition across multiple markets,” but declined to comment further on the deal. As of the third quarter of 2023, the company had bought 2,291 homes for $854 million during the year, which includes the 264 homes in the Las Vegas Valley, according to its latest earnings report. Starwood Capital declined to comment on the sale.
Noah Herrera, a real estate agent who has worked in the Las Vegas Valley for nearly 30 years, said Wall Street-backed hedge funds and large corporate landlords first got involved in the housing market after the Great Recession in 2008-09 when real estate values bottomed out across the country.
Herrera said he worked with a few corporate landlords during the initial buying phase in 2008-09, and they told him they would resell what they bought in five years. But these landlords never put these houses back on the market, he said.
He said what scares him the most about corporate America getting involved in residential real estate is what are known as “rental-backed securities,” where companies like Invitation are selling to investors. The product has a lot of similarities to mortgage-backed securities, one of the downfalls of the housing market during the 2008-09 crash.
“They’ve turned these homes into collateralized rental obligations. They’ve collateralized them and what they’re doing is swapping homes like stocks for one another.”
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