Posted by Sam Fenny - Memes and headline comments by David Icke Posted on 9 April 2024

You will own nothing … Blackstone Making $10 Billion Multifamily Purchase, Going on the Real Estate Offensive

Blackstone has agreed to acquire an owner of upscale apartment buildings for about $10 billion, signaling that one of the world’s largest real-estate investors is ramping up investments again after a period of moving more cautiously.

Blackstone is taking private Apartment Income REIT, known as AIR Communities, which owns 76 rental housing communities that are primarily in coastal markets, including Miami, Los Angeles, and Boston, the companies confirmed Monday. Blackstone plans to invest another $400 million to improve the properties, the firm said.

The deal was reported earlier by The Wall Street Journal.

The acquisition is Blackstone’s largest transaction in the multifamily market. It reflects the firm’s bullishness on rental housing and its belief that commercial real estate overall is bottoming and the time is ripe to step up investments.
“We can see the pillars of a real-estate recovery coming into place,” Blackstone President Jonathan Gray said on an earnings call earlier this year. “We are, of course, not waiting for the all-clear sign and believe the best investments are made during times of uncertainty.”

The commercial real-estate market has been suffering its worst downturn since the 2008-09 financial crisis. Higher interest rates have hurt values of most property types because prices rise and fall depending on how much it costs to borrow.

Office-building vacancy is at record levels because more businesses are allowing workplace flexibility for employees. New supply has put pressure on apartment rents in many markets.

The forces together have caused commercial-property sales volume in the market to collapse. In the 12 months ending in February, investors bought $359.5 billion worth of U.S. commercial property, about half the deal volume of the previous 12-month period, according to MSCI Real Assets.

Many investors still aren’t ready to jump back into the market again. Prospective sellers might feel that prices will rise once the Fed begins cutting interest rates, which is expected later this year. But buyers often feel that prices still might fall further because of bearish trends at work in the commercial-property market.

“If I’m a seller, I’m holding out hopes that the Fed does as it’s signaling,” said Jim Costello, chief economist of MSCI Real Assets. “If I’m a buyer, I will underwrite every worst case before I jump in.”

What’s more, close to $820 billion of U.S. commercial property loans could mature in 2024, according to MSCI. Most owners wanting to refinance will face higher rates than those that they have been paying.

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