The world’s largest commercial real estate owners have been buying up stocks after the real estate market bottomed out earlier this year.
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Blackstone is considering further public disclosure of its holdings.
Blackstone President Jonathan Gray said on an earnings call Thursday morning that the company spent or committed $22 billion on real estate acquisitions in the first nine months of this year, double the spending for the same period in 2023. That’s all. He said he has already pledged $4 billion. % of its flagship $30 billion real estate fund, Gray said.
One analyst asked when the company would move toward selling some of the $325 billion in real estate assets it manages.
“This year’s balance is very heavy on investment versus harvest,” Blackstone CEO Stephen Schwarzman said in response. “As we work through this year, I think we’ll probably see more investments early on and things start to balance out, and then we’ll hopefully see more awareness.”
He added that the company will continue to acquire properties and companies that own data centers, industrial properties and rental housing, adding that the company will continue to acquire properties and companies that own data centers, industrial properties and rental housing, and that office ownership will continue to grow after management has touted its low exposure in recent years. He added that he might consider returning.
“I think we’ll find interesting places to put capital. Inside the office, we’re going to do things that are selectively interesting, especially high-quality buildings, and even build retail around a space that’s primarily a grocery store rather than an enclosed mall.” We might be able to find it,”’ Schwartzman said. “So I think we’re in the midst of a broad recovery in real estate.”
Blackstone’s third-quarter results exceeded expectations. Distributable profits, a closely watched measure of profit at the world’s largest alternative asset manager, reached nearly $1.3 billion, about 10% higher than analysts expected, Bloomberg reported.
Blackstone increased assets under management from $1.08 trillion in the second quarter to $1.11 trillion in the third quarter, and its credit division overtook real estate as the business segment with the most assets under management at $354.7 billion. According to Bloomberg, the company reclassified some of its CRE bonds from real estate to credit.
The company is also in the planning stages of taking some of its largest holdings public as Wall Street has seen record gains this year.
“We are preparing to take some of our portfolio companies public,” Gray told the Financial Times. “I think the discussion goes from theoretical to practical, talking about things like timing. When you have a stock market this strong, it’s like a magnet to pull companies out of the private markets.”
Gray said he believes the recent rally in technology stocks shows investors are hungry for initial public offerings again.
Last month, Blackstone sold budget motel chain Motel 6 to Orabelle Stays for $525 million, and in May sold the 450-room Turtle Bay Resort Hotel in Hawaii for $725 million. The company has executed several large portfolio sales in the past year, including the sale of . The company is also considering selling its London-based events group Clarion Events for more than $2.6 billion, according to Reuters.
The most scrutinized fund in Blackstone’s real estate portfolio is the Blackstone Real Estate Income Trust, a semi-liquid vehicle from which investors have withdrawn $15 billion over the past few years.
Schwarzman said BREIT repurchase requests (when investors request funds to buy back their own shares) are down 90% from their peak.
“Based on current trends, BREIT is clearly on track toward positive net flows,” Schwartzman said.
