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THR California

Blackstone’s $196,000,000 shopping spree in Sacramento

November 18, 2013 By Ryan Lundquist 6 Comments

Did you ever dream of winning a shopping spree as a kid? I used to imagine myself having ten minutes to fill up a cart at Toys ‘R Us with whatever I wanted. I would’ve headed straight for the baseball cards, bikes, toy guns and sports equipment. Of course I was never lucky enough to do something like that, but I’m still holding out hope for a Home Depot or Lowes spree one of these days.

$196 Million of Local Real Estate: If you didn’t know, there was a $196 million dollar real estate shopping spree that happened in the Sacramento market over the past year or so. As reported by The Sacramento Business Journal, the private equity fund Blackstone purchased roughly 1,100 homes in the local market since January 2011 (with the bulk of these purchases being after August 2012). In all Blackstone has acquired about 21,000 properties in the United States over the past year. In the Sacramento area they’ve done business as THR California, IH2 Property West and IH3 Property West, and they’re holding their properties in hopes of making more money by creating bonds from rentals. 

housing supply and median sales price by sacramento appraisal blog blackstone

Goodbye Blackstone? Over the past months Blackstone has seemingly begun to pull back on their aggressive purchasing plan. They’re still buying properties, but as of late they’ve been laying low. Some say they are done, but at the same time their system has worked well and they can easily get things moving with IH4 in 2014 if they want. Ultimately their local presence lately has felt nothing like it was last year when they were a definite catalyst in driving up values for the rest of the market. Depending on how you look at it and whether you bought or sold this past year, it’s probably either good or bad to have had one investment fund step in to buy 1,100 properties in such a short time span. Instead of parsing the arguments on both sides though, I’d rather focus on their slowdown and simply say it looks like we are seeing Blackstone’s year of market dominance fade….. for now at least. In the mean time we can expect to continue to see conventional and FHA buyers pick up their slack while Blackstone and other cash buyers are more dormant or pull out of the market. While it’s easy to criticize Blackstone, let’s consider one last thing. If you look at the graph above, you’ll see they came in at just the right time as the real estate market hit bottom after years of decline, and they also look to be slowing down at a good time also. Maybe there is a business lesson here to consider?

Blackstone Invitation Home Signs in Sacramento

UPDATE on 11/21/2013: The Sacramento Bee posted a story that states Blackstone has purchased nearly 1,500 homes in the Sacramento area. RealtyTrac shows closer to 1100 and Tax Records is about half of what RealtyTrac shows. All things considered, it is not easy to track the actual number because different sources say different things.

Questions: Any thoughts on Blackstone as they have been slowing their pace? What store would you like to win a shopping spree at?

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Filed Under: Market Trends, Resources Tagged With: Blackstone, Blackstone in Sacramento market, cash investors, graph of housing inventory, graph of median price, Home Appraiser, House Appraiser, IH2 Property West LP, IH3 Property West, IH4, investment funds in Sacramento, real estate shopping spree, Sacramento real estate trends, THR California

Blackstone, Natomas & Cash in Sacramento

September 3, 2013 By Ryan Lundquist Leave a Comment

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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Filed Under: Market Trends Tagged With: Blackstone, cash decreasing in Sacramento real estate, Home Appraiser, House Appraiser, IH2 Property West, investment funds in Sacramento, investor cash Sacramento, less cash in market, Real Estate Appraiser, real estate market trends, THR California

Seeing the reality of Blackstone’s mass purchases

June 24, 2013 By Ryan Lundquist 12 Comments

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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Filed Under: Market Trends, Resources Tagged With: Blackstone, Blackstone purchases in Sacramento, College Glen, Home Appraiser, House Appraiser, IH2 Property West, Investment Fund in Sacramento, Natomas, private equity fund, Rancho Cordova, Rosemont, Sacramento appraisals, South Sacramento, THR California, Wall Street investors in Sacramento

Six trends in the Sacramento real estate market

February 4, 2013 By Ryan Lundquist 2 Comments

Let’s take a drive through the real estate market in January 2013 and “stop” off at six quick destinations to highlight some trends in the Sacramento area. I’d be curious to hear your take too, so feel free to comment below.

Stop 1:  The Distressed Market

Short Sale and Foreclosure Percentages in Sacramento County - by Sacramento Appraisal Blog

It’s incredible to see how the market has shifted in recent years – particularly over the past year as inventory has shrunk and foreclosure sales (REOs) have seen a massive decrease. It’s also striking to consider the total percentage of distressed sales (short sales + foreclosures) right now is less than half of what it was during January 2009.

Stop 2:  Cash Spending Spree

Sacramento Placer Yolo County Cash Stats January 2013 and 2012 - by Sacramento Appraisal Blog

Overall it seems cash stats are fairly similar to what they were in Q4 of 2012, though maybe there was a slight dip. It’s remarkable to think 35.5% of all sales in Sacramento County in January were cash. Ultimately we’ll see what the numbers do through an entire quarter when there is more time to really unpack stats. Keep in mind there are far fewer sales in Yolo and Placer County, so these stats really do need more than just one month to become clear.

Stop 3:  Cash under $200,000

Trend Graph - Sacramento Placer Yolo County Cash Stats January 2013 and 2012 - by Sacramento Appraisal Blog

Cash sales were very dominant during the past two quarters of 2012 under $200,000. There was overall a slight downtrend in January, but that’s only one month of data. Let’s see what happens over these next few months to really get a better picture. Will investors continue to devour the market in 2013?

Stop 4:  Comparing FHA, Cash & Conventional under $200,000

Cash FHA Conventional Stats in Sacramento County - by Sacramento Appraisal Blog

These figures help illustrate what it’s like in the market right now for buyers under $200,000. While it’s not always easy to get an FHA offer accepted, it’s still important to realize 1 in 5 sales are still going FHA. Cash and conventional have been the most dominant forces in the market. Anything you’d add? Realtors, what are you experiencing in the trenches?

Stop 5:  The job market in Sacramento

The unemployment rate is finally below double digits in Sacramento County. 9.9% is still really high, but it hasn’t been this low since January 2009. Honestly, I figured the unemployment rate would have increased recently in light of closures by Campbell Soup and Hostess, but it keeps going down.

Unemployment-in-Sacramento-County-Jan-2009-to-Dec-2012-Sacramento-Appraisal-Blog

Stop 6:  Rental signs are a “sign” of the times

Blackstone Signs in the Sacramento Market - Photo by Ryan Lundquist

Have you been seeing these signs throughout the Sacramento area? These signs are on many properties that have been purchased by the private equity fund Blackstone (they’re buying as “THR California”). This photo was taken in Natomas, and there were actually three signs on this one street (though I could only fit two in the shot). The questions we all wonder are: 1) When will they slow down purchasing?; and 2) Can they effectively manage such a large portfolio?

Question: What else has been happening the market? What are you seeing? I’d love to hear your thoughts in the comments below.

If you have any questions or Sacramento home appraisal or property tax appeal needs, let’s connect by phone 916-595-3735, email, Twitter, subscribe to posts by email (or RSS) or “like” my page on Facebook

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Filed Under: Market Trends, Resources Tagged With: 2013 real estate market trends, Blackstone, cash in Placer County, cash in Yolo County, cash purchases in Sacramento County, distressed sales in Sacramento County, FHA and conventional, hedge fund purchases, Home Appraiser, House Appraiser, investors buying properties, low inventory, REO sales, sacramento appraisers, Short Sales, THR California, undersupply of listings, unemployment rate Sacramento County

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