Commercial
New York
“Scale is still our calling card”: Jon Gray talks Blackstone’s real estate strategy for 2020 and beyond
Trending
How Blackstone became the world’s biggest landlord
Firm’s focus shifted from traditional private equity to real estate over past decade
Until about a decade ago, Blackstone Group derived most of its profits from traditional private equity. But following a dramatic expansion into real estate driven by CEO-in-waiting Jonathan Gray, massive property deals are now the company’s calling card.
With an estimated real estate portfolio of $325 billion, Blackstone is now the world’s largest real estate company, according to Fortune.
Of that total, $163 billion comes from Blackstone’s own real estate equity capital — which has multiplied eightfold since the company went public in 2007 — while the rest is financed with debt.
As rising property values and a slowing economy have made it harder to find high-yielding deals, Blackstone is increasingly investing in unglamourous assets such as warehouses and rental properties in the world’s “knowledge centers” — rapidly gentrifying cities like New York, London, Berlin and Stockholm.
Read more
Commercial
New York
How "third-grade math" led to one of Blackstone's first RE deals
Commercial
New York
Blackstone’s warehouse play challenges Prologis’ claim to the throne
Blackstone’s real estate investments are classified into two basic types — riskier “opportunistic” funds with average annual returns of around 15 percent, and more conservative “Core+” funds with returns around 10 percent.
The firm’s relationships with large institutional investors have given it a significant advantage when pursuing massive deals. Last year, it closed on a record $20.5 billion opportunistic fund known as Blackstone Real Estate Partners IX (BREP IX), which co-invested in the firm’s $18 billion industrial portfolio acquisition from GLP last June.
“If a $20 million office building is for sale, you might have 20 bidders,” Blackstone’s head of Americas acquisitions Tyler Henritze told Fortune. “When it’s a $20 billion deal, the competition is a lot more limited.” [Fortune] — Kevin Sun
Recommended For You