NORTH AMERICA – The Blackstone Group has made its first foray into core real estate with a $968m (€709m) investment into the EDENS Investment Trust, a privately held retail real estate investment company.
Terry Brown, chief executive at EDENS, said: “The investment by Blackstone will be this investor’s first move into the core real estate sector.
“Blackstone has been a long-time player in the area of opportunistic real estate. It is now out in the market raising capital from third-party institutional investors for its investment in EDENS.”
In a statement, Nadeem Meghi, managing director at Blackstone, said: “With its innovative approach to the industry and its strong and creative executive team, EDENS has redefined the retail landscape, creating a sophisticated platform, perfectly positioned for long-term value creation in an investment environment where such capabilities are critical.”
Blackstone’s investment covered two parts.
One was the $718m acquisition of the position in EDENS previously held by the State of Michigan Retirement System.
The other was a new $250m investment in EDENS.
“Michigan made a decision that it wanted to take some capital out of real estate and into the infrastructure asset class,” Brown said.
“The pension fund felt the investment in EDENS was one of its real estate investments where it could get some liquidity quickly. They have been with us for 16 years and earned a 13% IRR in our company during that time.”
Blackstone’s investment is part of $1.5bn of new investment capital placed into EDENS by three major institutional investors.
Both the New York State Teachers Retirement System and JP Morgan Asset Management invested $250m of new capital.
All of this equity will be used by EDENS to growth the company in future.
The three institutional investors together own a 92% stake in EDENS.
The private company holds the other 8% stake.
Sheryl Crosland, managing director at JP Morgan, said: “JPMAM, on behalf of its Strategic Property Fund and NYSTRS, looks forward to continuing its partnership with EDENS and expanding its investment, which has been a key and highly successful component of both investors’ strategies since 2000.”
EDENS is a major owner of shopping centre properties along the East Coast of the US, particularly in the metropolitan areas of Atlanta, Boston, Miami, New York, Washington DC.
Its investment strategy includes urban acquisitions and development and redevelopments.