Blackstone, Apollo, KKR take market hit on Evergrande tumult

Firms suffer as Chinese developer inches toward potential default

National /
Sep.September 20, 2021 06:59 PM
Blackstone Group's Stephen Schwarzman, KKR's Henry Kravis and Apollo's Leon Black (Getty, Facebook, iStock)

Blackstone Group’s Stephen Schwarzman, KKR’s Henry Kravis and Apollo’s Leon Black (Getty, Facebook, iStock)

Global investment firms with real estate holdings took a beating in markets on Monday as China Evergrande inched closer to missing interest payments on its debt. While global markets slumped, U.S. real estate stocks held their ground.

Blackstone Group, the world’s largest landlord, dropped about 7 percent, as did Apollo Global Management and eXp World Holdings. KKR fell 6 percent while the Carlyle Group slid almost 8 percent. The Real Estate Select Sector Index, which matches the stock price performance of publicly traded real estate companies in the S&P 500, fell about 0.6 percent as the Dow Jones Industrial Average ended the day 1.7 percent lower.

Some $4.7 billion of Evergrande bonds due in 2025 traded below 25 cents on the dollar, a decline from 80 cents as recently as May, the Financial Times reported.

More than a decade after the implosion of the U.S. market for residential mortgages, China faces a test of how it will deal with its own overleveraged real estate companies.

Oceanwide Holdings, China Vanke and Greenland have each crossed at least one of the “three red lines” set by Chinese regulators, who focused on varying measurements of leverage. Blackstone abandoned plans to purchase Chinese development firm Soho China earlier this month.

Yet investors have flocked to bonds sold by Chinese companies in international markets. A round of interest payments to Evergrande bondholders is set for Thursday.





    Related Articles

    arrow_forward_ios
    With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)
    Real estate stocks push up this week as U.S.-China trade tensions ease
    Real estate stocks push up this week as U.S.-China trade tensions ease
    416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)
    Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
    Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
    Real estate powers Blackstone’s best quarter ever
    Real estate powers Blackstone’s best quarter ever
    Real estate powers Blackstone’s best quarter ever
    Chinese developer willing to sell Manhattan supertall site at big loss
    Chinese developer willing to sell Manhattan supertall site at big loss
    Chinese developer willing to sell Manhattan supertall site at big loss
    Signature Bank CEO Joseph DePaolo (Signature Bank, iStock)
    Signature Bank reports record results
    Signature Bank reports record results
    Hudson Yards (Getty, iStock)
    City’s bet on Hudson Yards beginning to pay off
    City’s bet on Hudson Yards beginning to pay off
    The Closing: Ron Dickerman
    The Closing: Ron Dickerman
    The Closing: Ron Dickerman
    Fantasia Chairman Pan Jun (Getty)
    Evergrande isn’t only Chinese developer in deep debt
    Evergrande isn’t only Chinese developer in deep debt
    arrow_forward_ios

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

    Loading...