GLOBAL - The Blackstone Group has closed its latest real estate fund and achieved capital commitments totally $10.9bn (€6.92bn) - an impressive total during a difficult time for fund-raising.
This latest fund, the Blackstone Real Estate Partners VI, is the largest real estate opportunity fund raised to date, but the Blackstone has created a total of nine real estate funds so far, with total capital commitments of $25.7bn.
The group has completed more than 225 separate investments in North America and Europe since 1992, with a total transaction value of some $132bn, and has delivered returns of more than 31%, after fees, in that time.
The firm is confident there are attractive investment opportunities for the fund to access as, speaking at the PREA Spring Conference in Boston at the end of March, Jonathan Gray, senior managing director and co-head of Blackstone's real estate group, asserted "there are more favorable risk-adjusted returns in the USA today than there were a year ago".
Financing is tough, he noted, adding "now, not only for transitional assets, but even for regular assets if they are large enough, you can't get loans".
Interestingly, Gray also sees potential in the hospitality sector, which is expected to be hit hard by the global economic downturn.
"Everyone is expecting it to be like after 9/11," Gray said. "We are certainly seeing moderation, but it is still positive. We will see contraction, but not so draconian."
Blackstone acquired Hilton Hotels last July, adding it to an already substantial hospitality portfolio.