Blackstone refunds real estate

Aug.August 27, 2010 04:30 PM

Blackstone Group and some of its managers have returned $3 million worth of performance fees earned during the commercial real estate boom to investors in one of its real estate funds, and another $15.7 million in refunds may soon be on the way, Bloomberg news reported. Blackstone took in a total of $1.74 billion in performance fees through its property buyout funds between 2004 and 2007, allocating some of those profits to more than 100 individuals. But in the years since, prices for the office towers, hotels and apartments it acquired have dropped by around 39 percent. Clawback provisions for private-equity funds typically stipulate that if its holdings permanently decline in value, the firm and its executives return a portion of their profits to investors. Blackstone isn’t the only private equity fund forced to make refunds in the wake of the real estate crash, nor is it the first. “That is what happened when the Internet bubble burst and there is certainly the potential for that with the sharp downturn in the real estate market,” said Michael Harrell, of law firm Debevoise & Plimpton. Blackstone said in a statement that it expects its funds to be profitable going forward and that “any final clawbacks will be insignificant.” [Bloomberg]


Related Articles

Fordome Investment Group’s Kris Rodriguez and Blackstone’s Stephen Schwarzman (Credit: Getty Images, Google Maps)

Blackstone plans to build new Medley warehouse

Placeholder image

Blackstone sells Weston hotel for $12M

Industrial sales are up

South Florida’s industrial sales jump to over $1B in Q3 2019

Daily Digest Miami

Scaramucci slashes his sights on his Opportunity Zone fund, Florida’s first LGBTQ+ senior housing development breaks ground: Daily digest

Blackstone CEO Stephen A. Schwarzman and 5120 Northwest 165 Street

Blackstone buys two Miami Gardens industrial properties for $14M

3208 Northwest 72 Avenue and Blackstone CEO Stephen Schwarzman (Credit: Google Maps and Getty Images)

Blackstone buys industrial portfolio near Miami airport for $56M

Blackstone CEO Stephen A. Schwarzman and Southwest 13th Court (Credit: Google Maps)

Blackstone snags industrial site in Pompano Beach for $10M

Blackstone CEO Stephen A. Schwarzman, the Exchange Lofts apartments at 115 Northeast Third Avenue in Fort Lauderdale

Blackstone sells the Exchange Lofts in downtown Fort Lauderdale for $23M