Blackstone closed its latest commercial property debt fund with $8B raised, matching the record for similar investment vehicles.
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Blackstone Real Estate Debt Strategies V will target assets in North America, Europe and Australia, The Wall Street Journal reported. The fund has been tailored to capitalize on the capital dislocations in the market and the $1.5T wall of debt maturities coming due this year.
The private equity giant’s latest fund matches the record Blackstone raised for a similar fund that closed in September 2020. It took Blackstone roughly two years to raise the latest $8B.
“We are extraordinarily appreciative of our investors for allocating this amount of capital during this period of market dislocation,” Tim Johnson, global head of Blackstone’s real estate debt strategies, said in a statement. “We could not be more enthusiastic about the opportunities ahead.”
The success of the fund is the latest signal that investor sentiment is warming to commercial real estate assets. REITs have become increasingly popular buys that analysts say will benefit further from the uncertainty injected into the economy by President Donald Trump’s trade policies.
The sector was largely excluded from the post-Election Day stock market surge, but REITs have managed to hold on to more of their value during the proceeding stock sell-off as the market tries to price in Trump’s whipsawing tariff proclamations.
BREDS V, as the fund is known, made its first deals in late 2023, the WSJ reported. The fund will make new property loans and purchase existing loans, and it plans to partner with banks on deals where Blackstone will take the less senior but higher-yielding debt.
The fund also plans to provide bridge and mezzanine financing to properties that were financed when interest rates were low and are now facing their maturity dates. Those properties are often worth less now, in part because of higher debt costs, and need to bring in new capital to fill the gap.
Blackstone also plans to buy loans from banks and insurance companies that are looking to reduce their exposure to commercial real estate.
The Blackstone Real Estate Debt Strategies group has $77B in combined assets under management, while the firm’s total real estate assets under management reach $315B.
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