February 1, 2017 / 3:08 PM / 3 years ago

Invitation Homes rises in IPO debut

(Reuters) - Shares of Invitation Homes Inc (INVH.N), which is backed by private equity firm Blackstone Group, rose as much as 1.6 percent in their market debut on Wednesday, valuing the largest U.S. home rental company at about $6.14 billion.

The company raised $1.54 billion in its initial public offering on Tuesday, the largest by a U.S. real estate investment trust (REIT) since Paramount Group Inc’s (PGRE.N)$2.29 billion IPO in 2014.

Invitation Homes’ shares opened at $20.10 and hit a high of $20.31 on the New York Stock Exchange.

Blackstone Group LP (BX.N) founded Invitation Homes in 2012, about five years after the housing market began crashing and it started buying foreclosed homes in bulk.

REITS such as Invitation Homes became popular after the recession as investors sought to benefit from low mortgage rates and property values.

Blackstone has spent about $10 billion on the REIT’s 48,000-home portfolio, representing one of its biggest bets.

Invitation Homes’ IPO is the biggest so far this year, and the IPO market has seen more than $2 billion raised from seven offerings in January.

Nearly 15 percent of the REIT’s houses are in South Florida, while about 12 percent are in Southern California.

Blackstone which owns a 73 percent stake in the company, will not be selling any shares.

Deutsche Bank Securities and J.P. Morgan are lead underwriters for the IPO.

For-profit higher-education company Laureate Education (LAUR.O) is also scheduled to debut on Wednesday.

Reporting by Nikhil Subba in Bengaluru; Editing by Shounak Dasgupta

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