Blackstone bumps up bond offering after $10B multifamily buy

Blackstone is betting on investor interest after its biggest deal yet in commercial real estate. 

The investment giant has increased a commercial mortgage bond offering, which will in part help pay for its $10 billion acquisition of multifamily owner AIR Communities, Bloomberg reported.

Blackstone struck the deal in April with the company known as Apartment Communities REIT. The deal was Blackstone’s largest multifamily acquisition to date with more than 27,000 apartments across 10 states, and about 30 percent of them in California. 

The bond offering was originally set at $2 billion. However, asset managers told Bloomberg it will be increased to $2.95 billion and finalized this week.

Blackstone previously said it plans to spend $400 million to “maintain and improve” AIR’s properties and may spend more in the future. The deal is expected to close in the third quarter. 

The deal is the “highest-quality, large-scale apartment portfolio we have ever acquired, and is located in markets where multifamily fundamentals are strong,” Nadeem Meghji, Blackstone’s global real estate co-head, said in a statement.

Wells Fargo is structuring the deal.

The decision comes after Blackrock dropped out of a $1.3 billion CMBS sale backed by commercial real estate debt last month.

Blackstone also secured a $308.5 million refinancing deal earlier this year on a Park Avenue Tower. Morgan Stanley originated that loan and packaged it into commercial mortgage-backed securities to be sold to investors. The financing replaced a $425 million CMBS loan from 2019, also from Morgan Stanley.

 — Christina Previte