Industrial now 36% of Blackstone’s RE portfolio

In the past five years, Blackstone has pivoted its portfolio away from retail and hotels and instead turned toward one of real estate’s hottest asset classes — industrial — helping the investment firm avoid losses that others are now facing.

The company bolstered its presence in the industrial sector to account for 36 percent of its real estate equity value, up from only 9 percent in 2017, according to the Wall Street Journal. Demand for industrial space has boomed since the onset of the pandemic due to the rise of e-commerce.

In contrast, the company’s retail portfolio, valued at $341 billion, made up approximately 5 percent of its equity value, down from 19 percent in 2015. Hotels account for just 7 percent of the equity value, down from 23 percent in 2015.

“You had multiple years of expected growth [in online retail] compressed into the past year,” the firm’s co-head, Kenneth Caplan, told the Journal.

Blackstone also said that traditional office space only accounts for 5 percent of its equity value, down from 19 percent in 2015.

The firm has instead shifted its focus on specialized office space, such as biotechnology and life sciences labs and Hollywood studios.

[WSJ] — Keith Larsen