Blackstone says goodbye to CMBS fund

Net assets have declined by more than $200M since year-end

National /
Jul.July 15, 2020 08:55 AM
Blackstone's Jonathan Gray (iStock, Getty)

Blackstone’s Jonathan Gray (iStock, Getty)

Blackstone Group is throwing in the towel on a mortgage-backed securities fund.

The company is winding down the Blackstone Real Estate Income Master Fund, which realized a 24 percent decline when the coronavirus struck in March, according to Bloomberg. In a filing, Blackstone said closing the fund would provide its shareholders with cash and the “best path to maximize portfolio recovery.”

The fund will continue to be actively managed until it is liquidated. Blackstone said in its filling that the Master Fund’s assets “have begun to see a recovery in pricing since the recent trough related to the outbreak of COVID-19.” CEO Stephen Schwarzman forecasted a V-shaped recovery last month.

At the start of the year, the fund had $687 million in commercial mortgage-backed securities, and $227 million in residential mortgage-backed securities. The securities the fund held were reportedly packaged by both government entities and private issuers.

Blackstone bought the fund’s assets in part with $400 million borrowed through reverse repurchase agreements, filings cited by Bloomberg show. In the past five years, the fund had an average annual return of 5.52 percent.

By May 31, the fund’s net assets had fallen to $553 million from $773 million at year-end.

The closure of the fund comes as CMBS delinquencies soar, particularly in the hospitality sector. Tom Barrack’s Colony Capital is at risk of losing control of two hotel portfolios financed by CMBS, and consensus is emerging in Congress for the federal government to prop up the market. [Bloomberg] — Erin Hudson


Related Articles

arrow_forward_ios
(Getty)
Manhattan office leasing jumps as availability and rents drop
Manhattan office leasing jumps as availability and rents drop
New York attorney general Letitia James and 109-20 Queens Boulevard in Forest Hills (Getty, Google Maps)
Pinnacle’s Joel Wiener penalized for hiding condo conversion costs
Pinnacle’s Joel Wiener penalized for hiding condo conversion costs
(Photo Illustration by The Real Deal with Getty Images)
US retail real estate rises from the ashes
US retail real estate rises from the ashes
Rubenstein Partners' David Rubenstein and 25 Kent Avenue in Williamsburg (Getty Images, Twenty Five Kent, Rubenstein Partners)
Rubenstein rolls co-working company into 25 Kent
Rubenstein rolls co-working company into 25 Kent
Friedkin Property's David Friedkin 2 Canfield Avenue (LinkedIn, Google Maps, Getty)
GID sells multifamily complex for $113M
GID sells multifamily complex for $113M
Regal Ventures’ Alexander Smith with 301 West 53rd Street (LinkedIn, Fifty Third and Eighth, Getty)
Regal Ventures picks up Midtown retail condo in strong week of i-sales
Regal Ventures picks up Midtown retail condo in strong week of i-sales
Wharton Properties’ Jeff Sutton with 1551-1555 Broadway
Sutton faces foreclosure on Times Square American Eagle
Sutton faces foreclosure on Times Square American Eagle
U.S. Treasury Secretary Janet Yellen
NY gets more federal rent aid — but only 6% of need
NY gets more federal rent aid — but only 6% of need
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...