Improving real estate market
Blackstone expanded its real estate operations by 68% to $914 million compared to the first quarter of previous year. The increase in revenues was mainly driven by strong operating fundamentals across real estate asset classes. The company’s Opportunistic Real Estate funds’ carrying value appreciated 8.2% for the first quarter. Its overall economic income doubled, backed by strong performance fees and investment income.
Blackstone, in the real estate space, faces competition from REITs like Simon Property Group (SPG), Sun Hung Kai Properties, Cheung Kong Holdings, Public Storage, and other major players that form part of the Financial Select Sector SPDR Fund (XLF) and the iShares U.S. Financials ETF (IYF). The company also faces competition from the Carlyle Group (CG), KKR & Co. L.P. (KKR), Apollo Global Management (APO), and T. Rowe Price (TROW).
Higher fund raising
The realization activity increased due to improved liquidity in the market, total realization for the first quarter stood at $9.1 billion. Blackstone also raised huge sums for real estate activity, including $14.5 billion for the eighth global opportunistic real estate fund. The company expanded its operations inorganically by acquiring GE Capital’s real estate assets, resulting in an estimated $3 billion of capital invested across multiple vehicles.
The Blackstone Group L.P. (BX) is the world’s biggest real estate investor. The company manages seven global opportunistic real estate funds, four European real estate funds, and an Asia-focused fund. Blackstone has one of the most innovative real estate funds in the world, with the strong support of scalable capital.