At the start of the year, Jon Gray, president and chief operating officer of mega-investor Blackstone, announced that real estate values are “bottoming” and that the firm was ready to deploy capital into the sector.
These weren’t empty words: Blackstone has announced more than $10 billion in real estate investments since Gray’s pronouncement, Business Insider has found — essentially matching the more than $10 billion on real-estate related deals the firm announced in the month or so before Gray spoke.
In an effort to assess where the buying opportunities lie, BI has analyzed the firm’s real-estate dealings over the last six months. We found the firm has been spending on distressed real estate, such as its purchase of loans from the FDIC after the failure of Signature Bank, as well as investments in buzzy real estate, like data centers. The private-equity giant has also been investing in real-estate-adjacent businesses, such as engineering and infrastructure lending.
In a January earnings call, Blackstone president Jonathan Gray announced that commercial real estate, which recently suffered its biggest price declines in half a century, could soon hit bottom.
“We believe that real-estate values are bottoming,” Gray said. “While it will take time, we can see the pillars of a real estate recovery coming into place.”
Blackstone’s position as the largest owner of commercial real estate globally means the rest of the industry is watching them for indications of where the market might be headed, even if the private-equity giant has the advantage of its scale and capital efficiency that allows it to do deals that others can’t.
In a late April video, Gray doubled down on the company’s “enthusiasm” and the “very positive trends” its seeing across its business generally. Even in the face of “mixed signals” on inflation that may delay Fed rate cuts, Gray continued to paint a picture of optimism for the business.
“We think ultimately the Fed will get better data on inflation that will give them the ability to cut rates, but for now there’s high uncertainty and that creates opportunity,” Gray said in the video.
Here are the 7 recent real estate and real-estate-adjacent deals that show how Blackstone is trying to get ahead of the CRE bottom in chronological order.
Read the full article here