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Advocates to Investors: Don’t let Blackstone use your money to put tenants at risk

February 14, 2024

Citing Blackstone’s history of raising rents and evicting tenants, advocates implore pension funds  to stop the firm from acquiring SFR company Tricon Residential

Ahead of today’s meeting of the Los Angeles County Employees Retirement Association (LACERA), the Private Equity Stakeholder Project (PESP) joins other advocates in urging LACERA and other investors to use their power to halt the proposed acquisition of single-family residential (SFR) company Tricon Residential by private equity giant Blackstone. In a public comment at the Los Angeles agency meeting, PESP is asking LACERA to tell Blackstone to halt this deal unless Blackstone agrees to standards that ensure basic protections for tenants and protect investors from potential headline and reputational risks arising from rent increases, evictions, and other predatory practices.

Blackstone, which is already the largest landlord in the U.S. and the world, announced last month that it planned to get even bigger by acquiring Tricon, which owns and operates 38,000 single-family rental (SFR) properties in the U.S. Blackstone already owns 28,000 SFR homes, and if the acquisition is approved, Blackstone would be the third largest SFR owner in the US.

Blackstone’s shoddy track record as a corporate landlord in Los Angeles and California has drawn negative media attention in the past. A local LA TV report profiled an LA City Employee who was forced to move out of her home after her Blackstone-owned landlord, Invitation Homes, raised her rent by $800. Another report by the Los Angeles Times detailed the problems of a young family whose home had water leaks, cockroaches, and mold that made them sick, and the couple said that Invitation Homes failed to make the requested repairs. 

Those practices also abound in other Southern California communities: 5400 Blackstone-owned rental units in the San Diego area experienced a hike in average rent of 34% — well above the area average of 20% — after being purchased by the private equity firm in 2021. One-fifth of those units experienced average rent hikes of 50% or more, with some increases reaching as high as 76%. Prior to Blackstone’s acquisition of these rentals, the units were widely considered to be affordable.

PESP is urging LACERA and other investors to demand that Blackstone improve its treatment of tenants by granting them basic protections. 

“Blackstone is putting investors’ reputation at risk because of their exposure to Blackstone’s poor track record as a landlord,” said Jordan Ash, Housing Director at Private Equity Stakeholder Project.  “Blackstone is directly contributing to the affordable housing crisis right here in Los Angeles and Southern California. Blackstone has exemplified its status as a subpar landlord that has filed to evict tenants and hike rents. The firm should not be given the opportunity to expand this bad behavior to tens of thousands of more rentals through its acquisition of Tricon. We urge investors to advocate against this deal until Blackstone cleans up its act.”

“Blackstone has a terrible track record for workers and tenants, failing to pay their workers living wages on the one hand and increasing rents with the other,” said UNITE HERE Local 11 Co-President Kurt Petersen. “We urge investors and stakeholders to oppose Blackstone’s planned acquisition of Tricon unless there are protections in place for tenants and to demand Blackstone resolve fair contracts for their hotel workers.”

In addition to Blackstone’s poor track record as a landlord in Southern California, the private equity firm is currently embroiled in labor disputes with workers of two Los Angeles hotels. Blackstone has failed to sign contracts with striking workers at the Aloft El Segundo and the Fairfield El Segundo. 

You can view the agenda and live stream of the LACERA Board of Investments meeting here. The meeting begins at 9:00 a.m. PT.

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