BAM Key Details:

  • In response to media scrutiny and social media discussions, BlackRock released a message with the aim of “setting the record straight.”  
  • The company acknowledges its active role in the U.S. real estate market but clarifies that it does not directly buy single-family homes.

For the past few years, institutional investors have found themselves at the center of media scrutiny about Wall Street purchasing individual homes. Of course, social media buzz continuously adds fuel to the fire. Just take a look at this Thread from 2021:

Recently, BlackRock launched a message with the purpose of “setting the record straight.” It seeks to dispel the misconceptions and confusion surrounding its activities and clarify its actual role in the real estate sector. 

BlackRock’s Stance: Not Buying Individual Houses

BlackRock emphatically states that it is not engaged in the purchase of individual houses in the U.S. The company stresses that it is often mistaken for other large asset managers and private equity firms actively involved in acquiring single-family residences.

At the end of its message, BlackRock states,

“Bottom line: BlackRock is an active investor in the U.S. real estate market, but we are not among the institutional investors buying single-family homes.”

BlackRock

$120 Billion Investment in U.S. Residential Real Estate

There have been many headlines in mainstream media stating institutional investors are buying up a large percentage of single-family homes, including this one from the Wall Street Journal

But according to a report by Moody’s Analytics, “Institutional owners make up approximately 3% of the total single-family rental market in the U.S.”

So, what is the role of institutional investors in the U.S. housing market? Each varies, of course. As far as BlackRock, it has an investment portfolio totaling approximately $120 billion on behalf of its clients. 

The message from BlackRock breaks down how it participates in the U.S. real estate market:

  1. Providing Capital for Mortgages: BlackRock emerges as a key player in mortgage securities, contributing to the availability of capital for American families looking to buy new homes. 
  2. Fueling New Housing Construction: BlackRock is actively invested in various programs aimed at providing financing for the construction of new homes, contributing to the expansion of the U.S. housing supply. The company has ventured into new construction projects tailored for the rental market, addressing the growing demand for purpose-built, single-family rental housing.
  3. Diverse U.S. Real Estate Investments: BlackRock diversifies its real estate investments by participating in multifamily properties, apartment complexes, and other residential real estate ventures. 

So, while BlackRock does not buy individual properties, it does “make capital available to individuals and families seeking to purchase homes.”  

And, as far as its investments in new construction, BlackRock states,  “Our focus is on building single-family rental housing that can be managed and operated similarly to multifamily properties with dedicated property management, leasing and amenities.”

On Thursday’s Hot Sheet, host Byron Lazine noted that while BlackRock isn’t buying single-family homes outright, it is providing capital for individuals or smaller investors to do so. 

Before signing off, he posed the question to viewers, 

“What’s your take? Do you believe BlackRock?”