Blackstone Shuts Down Home Partners’ Chicago Headquarters

Blackstone is pulling the plug on Home Partners of America after years of expansion in the single-family rental market.

Home Partners, led by CEO Jennifer Deason, will close its Chicago headquarters at 120 South Riverside Plaza and lay off 179 employees as part of a broader restructuring by the New York-based firm, which is integrating the build-to-rent company into Tricon Residential, another Blackstone subsidiary, Crain’s reported.

A WARN notice filed on Feb. 7 confirmed the job cuts, which will take effect as Home Partners completes its transition into Tricon. Staff members were asked to remain through March, with a retention package offered to those staying until the closure.

Blackstone acquired Home Partners in 2021 for $6 billion, adding 17,000 rental homes to its portfolio. The company’s rent-to-own program provided an alternative path to homeownership for buyers unable to secure traditional mortgages. It acquired Tricon Residential for $3.5 billion early last year.

The single-family rental market in Chicago has grown significantly over the past few years. About 93,000 single-family rental homes were added in 2023, with a similar number expected last year.

Home Partners has faced criticism over its rent-to-own practices. Fewer than a third of 195 homes analyzed in a five-year study were sold, and some were not sold to the original tenants, Business Insider reported in 2023. Some homes were sold to traditional buyers after residents were evicted.

Tricon will manage and honor all Home Partners leases and lease purchase agreements, and there will be no changes for tenants, including anyone who recently moved into a home.

“Home Partners provides locked-in purchase prices for each year of the program, so if the market improves and the homes’ value appreciates more than anticipated, residents can purchase the price at a below market value,” a Blackstone statement said. “Similarly, if a resident believes that their purchase price overvalues the home, they have the ability to walk away and find another home with no penalty.”

Rent-to-own is a sector with a “sordid” past and little oversight, David Reiss of Brooklyn Law School told the outlet.

Blackstone has been active in Chicago focusing mostly on the office sector. The firm is managing a $123 million loan for a struggling office tower at 444 North Michigan Avenue, which is facing imminent default after unsuccessful sale attempts.

The company, headed by CEO Stephen Schwarzman, is also negotiating a $1.3 billion three-year loan deferral on the 110-story Willis Tower at 233 South Wacker Drive, having already burned through the first five maturity extensions.

Office landlords are dealing with increased defaults, a 26.3 percent vacancy rate and declining property values. That’s driven by reduced office demand, remote work trends and tenants relocating to higher-quality office spaces.

— Andrew Terrell