Blackstone bets big on US housing market recovery
The group has agreed to buy control of 80 apartment complexes in the US from General Electric, valuing the properties at about $US2.7 billion ($2.94 billion)
The US reports say the deal reflects a gamble by Blackstone that the US residential housing market is on an upswing. Blackstone's real estate arm is its largest operation, and the deal with GE is the company's biggest investment in apartments in recent history.
Blackstone was also said to have made a big bet on traditional homes, spending more than $US5.5 billion to buy houses to rent for now and sell later.
GE, whose finance arm is selling the apartment properties, has been looking to reduce its real estate holdings, as part of an overall effort to reduce its size and risks.
Blackstone is nearing the completion of a deal to buy about $300 million worth of office buildings in Australia from GE Capital.
The assets include 90 Arthur Street in North Sydney, 127 Creek Street in Brisbane and 636 St Kilda Road in Melbourne. GE Capital is also selling a tranche of assets to the Pacific Alliance Group as it focuses on its property lending business.
Following the completion of the long-running sales program, Blackstone will have spent $2.5 billion on Australian property - including shopping centres, office buildings, logistics centres and bulky goods in the past two years.
Its largest single asset is the Top Ryde shopping centre in Sydney and the recently acquired Greensborough centre in Melbourne. It has also been touted as a possible buyer of a hotel portfolio belonging to Brookfield.
In addition, it owns the former Valad Property Group, which has several office assets that could be redeveloped into apartments.
On a recent visit, Blackstone global head of real estate Jonathan Gray said Australia had become a very important market to the group. "We have moved key people here, we have a platform in Valad, we intend to be big investors," Mr Gray said.
"I think we have the foundations of a really good business here."
Blackstone recently lodged a registration statement in the US, relating to the proposed float of Brixmor Property Group, formerly Centro Properties Group US.
Analysts said Blackstone could raise as much as $US700 million from the sale of 522 US shopping centres it acquired in 2011 as part of its $US9 billion rescue of Centro Properties.
If successful, it would be one of the biggest offers by a shopping centre real estate investment trust since the Simon Property Group's $US840 million float in 1993.
Frequently Asked Questions about this Article…
Blackstone agreed to buy control of 80 apartment complexes from General Electric’s finance arm, valuing the properties at about US$2.7 billion (approximately A$2.94 billion). The sale is part of GE Capital’s move to reduce its real estate holdings.
Blackstone’s real estate arm — its largest operation — is making major apartment and single‑family home purchases because the group views the US residential market as being on an upswing. The company has also spent more than US$5.5 billion buying traditional homes to rent now and sell later.
Following the completion of a long sales program with GE Capital, Blackstone will have spent about US$2.5 billion on Australian property over the past two years, across shopping centres, office buildings, logistics centres and bulky goods assets.
Blackstone is buying both multifamily apartment complexes (the 80‑property deal with GE) and large portfolios of traditional single‑family homes — the latter purchased to rent out now with the aim of selling later.
Potentially. Blackstone has lodged a US registration statement for a proposed float of Brixmor Property Group (formerly Centro Properties Group US). Analysts say the sale of 522 US shopping centres could raise up to about US$700 million, which could create liquid investment opportunities if the float proceeds.
Brixmor Property Group is the proposed US vehicle formerly known as Centro Properties Group US. Blackstone recently lodged a US registration statement tied to a potential Brixmor float after acquiring shopping centres as part of a rescue of Centro in 2011.
Yes. Blackstone owns the former Valad Property Group, which holds several office assets that could be redeveloped into apartments, according to the article. The group has also acquired major shopping centres like Top Ryde and Greensborough.
GE’s finance arm is reducing its real estate holdings as part of an effort to shrink its size and risks. In addition to Blackstone’s purchases, GE Capital has been selling a tranche of assets to the Pacific Alliance Group and other buyers as it refocuses its property lending business.
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