Home News Blackstone Puts Finishing Touches on Record Real-Estate Vehicle

Blackstone Puts Finishing Touches on Record Real-Estate Vehicle

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Black stone Ltd.

BX 2.15%

Is in the final stages of raising a record-setting new real estate fund as the greatest means of this kind, countering market volatility and the crowded landscape of financing.

Private-equity giants said in a regulatory filing Wednesday that they had completed a $ 24.1 billion commitment to Blackstone Real Estate Partners X, the latest version of a major real estate fund.

Blackstone has invested about $ 300 million in equity and has already allocated $ 5.9 billion to investors, and the fund will be $ 30.3 billion at the final decision, according to people familiar with the matter. They said the company raised a fund that would be the largest traditional private equity vehicle in history in just three months. Blackstone set a record high for a $ 26 billion buyout fund raised in 2019.

The new real estate fund will be 50% larger than its predecessor and will raise a pool of $ 20.5 billion in 2019. Together with Asian and European real estate funds, Blackstone holds over $ 50 billion in funding. Called an opportunistic investment, it tends to be risky and can have high returns.

This made the public market slump available to businesses, resulting in poor valuations and some listed companies looking for new sources of funding. Some of Blackston’s best-performing transactions — 2014 purchase of cosmopolitan casino and hotel Las Vegas 2016 Contract for Life Science Building Owners BioMed Realty Trust Inc. — I was hit during a period of market turmoil.

Strategies can backfire as market turmoil continues and valuations decline further. Rising interest rates and inflationary pressures increase the risk of real estate investment.

Numerous private equity funds It’s been on the market this year, and many are still trying to raise huge sums of money even after stock prices have fallen and transactions have run out. The surge in demand for new cash has overwhelmed the investment teams of institutions such as pension funds and endowments, meaning that many have delayed their commitment to everything but the top managers.

The size and speed of funding of Blackstone’s new fund shows that institutional investors are eager to continue to participate in vehicles offered by well-established and well-established managers. While buyout funds over $ 20 billion have risen in rank, there are still relatively few real estate megafunds comparable to Blackstone.

Like the company as a whole, Blackstone’s $ 298 billion real estate business Thematic investment strategies Our goal is to target areas of the economy where growth is above inflation. Therefore, we focus on four main areas. Warehouse used for e-commerce. Life science office building; rental housing; hospitality linked to travel and leisure.

This strategy has influenced recent investments Transactions in April, etc. Acquired PS Business Parks Inc., a listed real estate investment trust that owns warehouses and apartments, and acquired it in December.

Blue Lock Residential Growth REIT Ltd,

Rental housing REIT.

Write in Miriam Gottfried [email protected]

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It was published in the printed version on July 21, 2022 as “Blackstone Nears Record For Real-Estate Fund”.

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