Blackstone Group is increasingly becoming the go-to firm for large real estate transactions.
The $23 billion deal between Wells Fargo, General Electric and private-equity giant Blackstone is the latest proof of the firm’s position in the real estate industry, according to the Wall Street Journal.
“Blackstone’s scale in the real estate space is unmatched,” Morningstar analyst Stephen Ellis wrote in a note to clients Friday, as cited by the Journal. “This type of scale provides Blackstone with deep insight into the market, letting it put more capital to work.”
In recent years, Blackstone raised more than $28 billion to invest in real estate, the newspaper reported. The firm just completed fundraising for its $14.5 billion flagship property fund, which is the largest fund ever raised for real estate. Blackstone also raised the second, third and fourth largest funds, the newspaper reported.
Blackstone has outlived most of its competition. Investment banks such as Morgan Stanley and Goldman Sachs pulled back after their property investments lost value during the downturn. Brookfield Asset Management is among Blackstone’s biggest competitors today as well as publicly traded real estate investment trusts, according to the Journal.
“If you are so much bigger than everyone else, you can really just write a check even with no financing to just make something happen,” Stephen Schwarzman, Blackstone’s chief executive, said during a December conference, according to the Journal. “If you’re having a dialogue with a financial institution, it’s almost like, ‘tell us how much you want to sell, we’ll give you a price.'” [WSJ] — Claire Moses