The Real Deal Miami

Blackstone raises $14.5B for real estate fund

$1.3B more from individuals could be in the pipeline

April 01, 2015 10:30AM

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From left: Jon Gray and Steve Schwarzman

From left: Jon Gray and Steve Schwarzman

From the New York website: Blackstone Group raised $14.5 billion from institutions for a forthcoming real estate investment fund and plans to raise another $1.3 billion from individuals.

Blackstone, the world’s biggest alternative asset manager, has had enormous success with its existing real estate investment vehicles, according to Bloomberg News. Its seven previous global property funds have doubled their invested capital, with returns of 18 percent since 1994. The firm oversees $81 billion in real estate assets.

Sources familiar with the deal told Bloomberg about the fundraising progress, though the details will not be publicly available until the fund is done raising capital. Earlier this month, it was reported that the firm was looking to raise $15 billion.

“As we look into 2015, we’re very excited about our two flagship funds — one in real estate and one in private equity will be entering the market,” Laurence Tosi, Blackstone’s CFO, said at a conference last month. “The main competitors for us in real estate were largely the investment captive shops inside the investment banks. They’re all gone now.”

Jonathan Gray heads Blackstone’s real estate group, and is seen as a possible successor to CEO Steve Schwarzman.

The firm purchased Chicago’s Willis Tower for $1.3 billion this month, in the priciest-ever deal for a non-New York City office tower. In November, it purchased Vornado Realty Trust’s 1740 Broadway for $605 million. [Bloomberg News] — Tess Hofmann