Blackstone, Natomas & Cash in Sacramento

Wall Street collided with Main Street over the past year in the Sacramento market as institutional investors like Blackstone made mass purchases. Here is an image in the Natomas area of Sacramento to illustrate the homes that Blackstone bought in this neighborhood over a period of twelve months. Keep in mind these are only purchases listed in Tax Records, which is important since Realist data at times has only included about 50% or so of Blackstone’s acquisitions. It’s amazing to see so many new rentals by one investment fund, don’t you think?

THR IH2 Blackstone sales in Sacramento August 2012 through August 28 2013 per Tax Records - by Sacramento Appraisal Blog

While it is striking to see mass cash purchases, it’s also important to consider there has been less cash in the Sacramento real estate market lately – just as the graph below helps illustrate. As housing inventory has been climbing and price increases have begun to slow down, investors have seemed to take their foot of the gas pedal a bit over the past 60+ days. It seems like Blackstone has been slowing down too based on what I’ve been hearing from agents and also observing data-wise over the past few months (less sales over the past 90 days compared to the previous quarter). In my mind it is important what Blackstone does since they have been a huge player in the market. In short, this is worth watching over time.

cash purchases Sacramento County

Any thoughts, questions or stories to share? Feel free to comment below.

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Seeing the reality of Blackstone’s mass purchases

It’s one thing to hear about investors purchasing so many properties in Sacramento, but let’s see it. Even if you’ve only been following real estate casually, you’ve likely heard the private equity fund Blackstone has picked up well over 1000 properties in the Sacramento area since last August. No, that’s not a typo.

Let’s look at a few areas of Sacramento to visualize some of the neighborhoods where Blackstone has been most active. Each red label below represents a property that is owned by Blackstone. The bulk of these sales were purchased since last August, but there are still quite a few that have been owned for years.

Properties owned by Blackstone in Natomas

Blackstone has been purchasing as “IH2 Property West” and “THR California”. They’ve had a strong presence in Natomas as you can see – especially in older Natomas. It is important to note the information above is based on Tax Records alone and could very easily not include MANY other purchases that did not end up listed in Tax Records.

Properties owned by Blackstone in Rancho Cordova

There have also been quite a few purchases by Blackstone in Rancho Cordova. Most of the sales are in the 95670 zip code, while only a small amount have been located in the 95742 zip code.

Properties owned by Blackstone in Rosement and College Glen

There are also a decent number of Blackstone properties in Rosemont and a few sprinkled through College Glen and La Riviera. Neighborhoods that are ripe for first-time owners have typically been the primary target of this investment fund.

Properties owned by Blackstone in South Sacramento

Last but not least, here are Blackstone-owned properties in South Sacramento. This market has been a very affordable area under $200,000, which has been a sought after target price for the investment fund. By the way, Deutsche Bank just gave Blackstone 1.5 billion in additional credit over the past week (on top of their initial 2.1 billion credit line to purchase properties). We’ll see if any of the money finds it’s way into the local market.

Video interview with Blackstone from Bloomberg (worth a watch):

Questions: How do these images stir you? Or what do they make you think of? If you are renting from THR / IH2, what has it been like to rent from them so far? Any stories to share?

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