Invitation Homes

Invitation Homes, the home rental company controlled by private equity firm Blackstone Group, raised $1.54 billion in its initial public offering as the IPO market continued to show signs of a revival.

The offering was the largest by a U.S.-listed company in more than a year and the largest by a U.S real estate investment trust since Paramount Group raised $2.29 billion in 2014.

Invitation on Tuesday sold 77 million shares at $20 per share — within its previously indicated range of $18 and $21 — raising slightly more than analysts expected. In trading Wednesday, the stock rose as high as $20.42.

The IPO market saw more than $2 billion raised from seven offerings in January, a huge increase from the $81 million raised on only one offering in January last year. In 2016, there were two REIT IPOs, raising a total of $1.5 billion.

As Reuters reports, Blackstone, which owns a 73% stake in Invitation, began buying foreclosed homes after the housing market crash and has spent about $10 billion on the REIT’s 48,000-home portfolio, representing one of its largest bets.

“Invitation is part of a broader bet on Wall Street that homeownership will remain out of reach for many Americans,” The Wall Street Journal said, adding that homeownership has declined since the housing crisis amid stricter lending standards, mounting student debt, and potential buyers whose savings and credit diminished during the recession.

Invitation is now the largest home-rental company in the country, with nearly 15% of its properties in South Florida and about 12% in Southern California. Overall, 95% of its homes are occupied, according to the IPO prospectus.

The WSJ noted, however, that “some investors have questioned whether the growth of Invitation and its rivals will be limited now that the foreclosure crisis is over and home prices in many markets have exceeded their 2006 highs.”

The shares of Invitation’s two closest rivals, American 4 Rent and Colony Starwood, have risen by around a third and nearly 40%, respectively, since the end of 2015.

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