Thanks, SK, for clarifying the difference between a “hedge fund” and a private-equity REIT. I read the links CAR provided on this thread below (repeated by livinincali here) but didn’t possess your body of knowledge to actually determine if leverage was actually used in Blackstone’s and Santa Monica-based Colony Capital’s acquisitions (for example) or the degree at which these (SFR) acquisitions could have later been leveraged.
My understanding is that properties within coastal CA counties are not included in the (previously distressed) buy-and-hold portfolios of these two giant REITs. I am unclear if Blackstone has actually made any bulk acquisitions in CA. My understanding from the two e-mail messages I rec’d to start the thread below is that Colony had purchased up distressed SFR’s in bulk in the inland Counties of San Bernardino, Riverside, Kern, Fresno, Merced, San Joaquin, Sacramento and possibly Stanislaus.
It doesn’t seem as if there would be a good reason for lenders or Fannie/Freddie to unload in bulk SFR’s which are situated in urban CA coastal counties at deep discounts to REITs. My reasoning is that these REO’s were/are very salable due to having a good local job market and also traditionally having an otherwise “captive audience.”
