January 9, 2013

Wednesday Off-Topic (Moderated) Open Thread (010913)

Filed under: Lucid Links — Tom @ 6:00 am

Rules are here. Possible comment fodder may follow later. Other topics are also fair game.



1 Comment

  1. Guest Post: America Meet Your New Slumlord: Wall Street


    Blackstone has spent more than more than $2.5 billion on 16,000 homes to manage as rentals, deploying capital from the $13.3 billion fund it raised last year, said Jonathan Gray, global head of real estate for the world’s largest private equity firm. That’s up from $1 billion of homes owned in October, when Blackstone Chairman Stephen Schwarzman said the company was spending $100 million a week on houses.

    “The market is moving much faster than anybody thought possible,” Gray said during an interview in Blackstone’s New York headquarters. “Housing is much stronger than people anticipated.”…

    …It’s bought so quickly it’s “warehousing” more than half of the homes it’s acquired as it completes the purchase and hires staff and contractors to renovate and rent the properties, Gray said. It takes about 30 days to fix each home and then as much as 30 days to lease the property, he said.

    “While leverage is currently limited, potential financing options include secured credit lines, lending syndicates, high- yield debt, government sponsored enterprise-provided financing, and securitization,” Jade Rahmani, an analyst with Keefe, Bruyette & Woods Inc. in New York, wrote in a note yesterday…

    Have we returned to the old days prior to the Great Depression where companies would corner the market to make a securities issue rise in value via the creation of a bubble? I thought that attempting to “corner a market” was illegal? Am I off on this or does this only apply to stock purchase?

    I have to wonder if this company is “connected”? Are they anticipating a sudden rise in inflation via a drop in the value of the Dollar? Something is clearly up when a publicly traded company spends a billion dollars a month buying up empty homes…

    Comment by dscott — January 9, 2013 @ 4:57 pm

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