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Blackstone Group (BX -4.66%) manufactured headlines as soon as once more this 7 days by generating one more huge splash in the true estate sector. This time, the main option asset supervisor scooped up American Campus Communities, a serious estate expenditure have confidence in (REIT) focused on university student housing. The practically $13 billion offer is the latest in a string of headline-grabbing transactions by the business.
It is turning into a dominant pressure in the authentic estate sector. Here is a nearer glimpse at how Blackstone Group compares to its rivals in the true estate sector.
Impression source: Getty Images.
A behemoth among the asset option administrators
Blackstone is the world’s most significant asset manager. It has $881 billion of property under administration throughout four essential parts: genuine estate, private equity, hedge fund remedies, and credit history and insurance plan.
Serious estate is its largest focus space, with $279 billion of investor funds underneath administration throughout a $514 billion worldwide genuine estate portfolio. That would make it the global leader in actual estate investing:
Facts source: Firm internet sites. Chart by the author.
Blackstone has been splurging on actual estate above the earlier calendar year, creating several headline-grabbing discounts:
- Facts center REIT QTS Realty for $10 billion
- One-spouse and children dwelling rental system Home Partners of The usa for $6 billion
- Industrial REIT WPT Industrial Real Estate Financial investment Have faith in for $3.1 billion
- Condominium-focused residential REIT Bluerock Residential Development REIT for $3.6 billion
- Non-traded apartment REIT Useful resource REIT for $3.7 billion
- Apartment REIT Preferred Condominium Communities for $5.8 billion
- American Campus Communities for $12.8 billion
Quite a few of these discounts however haven’t shut still. When they do, they are going to widen Blackstone’s guide over Brookfield Asset Management (BAM -4.14%), Starwood Money, and KKR (KKR -4.00%).
Taking private actual estate to retail traders
1 of the essential drivers of Blackstone’s authentic estate shopping spree has been its achievement in raising money from retail traders over the past calendar year. Blackstone shaped a non-traded REIT, Blackstone Serious Estate Cash flow Rely on (BREIT), five decades back to appeal to retail investors who preferred obtain to the private real estate sector.
It is really been a smashing success. Blackstone’s means to make outsized returns for BREIT buyers has produced it a magnet for trader funds above the past 12 months:
Knowledge supply: Stanger Expenditure Banking. Chart by the writer.
Blackstone’s BREIT lifted a whopping 68.4% of all the money hauled in by non-traded REITs final calendar year, an common of $2 billion for every month. Blackstone’s big haul is primary extra option asset administrators to launch rival non-traded REITs concentrating on retail traders.
KKR introduced its non-traded REIT — KKR Real Estate Select Securities, or KREST — in May well 2021. In the meantime, Brookfield took around the advisory function of Oaktree’s non-traded REIT in November by seeding it with new property and renaming it Brookfield REIT.
Even so, Blackstone’s non-traded REIT stands out from the pack for the reason that of its achievement in offering returns. It outpaced all other non-traded REITs with a 30.2% total return over the past yr.
A massive driver has been its system of investing in higher-conviction themes like data proliferation, Sun Belt migration, affordable housing, and e-commerce. Its capability to create outsized returns from these stylish themes has enabled it to increase extra dollars from buyers. Which is providing it the money to make larger sized acquisitions, letting it to further more strengthen returns as a result of its increasing scale.
Blackstone’s accomplishment is driving its expansion
Blackstone is a single of the most important names in genuine estate. Its thematic investing tactic has enabled the firm to produce strong returns, which has buyers entrusting it with a lot more money. Which is allowing it to acquire a lot more real estate, furthering its actual estate dominance.