“It really started from people on the team leaning into the idea of having more diversity and wanting to start a program that was specifically targeted to historically underrepresented undergraduate students within real estate investing,” Wu said. “It was a ground-up program that was developed by people at Blackstone wanting to really move the needle … [Read more…]
Blackstone Group Inc. has announced raising the largest-ever real estate fund of $20.5 billion to be invested in property assets around the world. The private equity firm says the figure is $5 billion more than projected.
The firm issued a statement saying that the fund, named Blackstone Real Estate Partners IX (BREP IX), has already made its first investment. The fund is now purchasing U.S. industrial warehouse properties from Singapore-based logistics provider GLP for $18.7 billion, according to the firm.
In recent months, large buyout firms like Blackstone have been attracting a lot of capital from investors seeking higher returns not available in public markets. Accordingly, capital ready to be invested now exceeds $2 trillion, according to data provider Prequin.
Despite reports that there may be a recession around the corner, Blackstone says it deployed a record $56 billion over the past 12 months. The firm’s head or real estate and future CEO, Jonathan Gray says is having “no trouble finding things to spend money on.” The firm’s success in raising such funds is partly reflective of Blackstone’s continual double-digit returns.
In other news, DealBreaker says some private-equity firms are stockpiling cash, possibly in fear of President Trump policies forcing a recession. Blackstone co-founder and current CEO Stephen Schwarzman is a close ally of President Trump.
Blackstone is the world’s largest alternative asset manager and one of the biggest property investors, with $154 billion in real estate assets under management.
About Blackstone:
Blackstone is a global leader in real estate investing. Blackstone’s real estate business was founded in 1991 and has $154 billion of investor capital under management. Blackstone is one of the largest property owners in the world, owning and operating assets across every major geography and sector, including logistics, multifamily and single family housing, office, hospitality and retail. Our opportunistic funds seek to acquire undermanaged, well-located assets across the world.
Blackstone’s Core+ strategy invests in substantially stabilized real estate globally through regional open-ended funds focused on high-quality assets, and Blackstone Real Estate Income Trust, Inc. (BREIT), a non-listed REIT that invests in U.S. income-generating assets. Blackstone Real Estate also operates one of the leading global real estate debt businesses, providing comprehensive financing solutions across the capital structure and risk spectrum, including management of Blackstone Mortgage Trust (NYSE: BXMT).
Phil Butler is a former engineer, contractor, and telecommunications professional who is editor of several influential online media outlets including part owner of Pamil Visions with wife Mihaela. Phil began his digital ramblings via several of the world’s most noted tech blogs, at the advent of blogging as a form of journalistic license. Phil is currently top interviewer, and journalist at Realty Biz News.
Fears over turbulence in commercial real estate is creating opportunities for well-capitalized investors, according to Blackstone Inc. co-head of global real estate Kathleen McCarthy.
“When sentiment gets really negative, prices decouple from fundamental value,” she said in a Bloomberg Television interview with Francine Lacqua. “We have a practice of trying to quiet that noise and look at the information in front of us.”
High vacancy rates in U.S. office markets and the impact of rising interest rates on property values in Europe have prompted a brutal selloff in publicly traded real estate stocks and bonds. The depth of the downturn implies investors are expecting prices to collapse, though a standoff between buyers and sellers means the pain has yet to fully filter through to asset values.
Blackstone has deployed about €3.5 billion ($3.8 billion) in Europe so far this year, sticking mostly to properties where it sees the best potential for rents to rise and offset higher borrowing costs, like warehouses, student housing and lab space, McCarthy said.
“We have more data than any other investor on the planet,” she said. “That informs where we transact.” Blackstone is being very selective but is still prepared to “lean in to where we see strength in the short term and over the long term,” she added.
The volume of German commercial real estate deals in the first half of the year was about two-thirds below the long-term average. But pressure is building on landlords that need to sell assets in order to reduce their relative indebtedness, which is rising as asset values fall.
“It takes a period of time for sellers to recognize that it is maybe time to move on or settle in to new pricing,” McCarthy said.
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