Photo: Flickr / Benson Kua
Blackstone Group, one of the largest private equity firms in the world and one of the biggest players in the global property market, is preparing to unwind its massive $22 billion U.S. commercial real estate portfolio.The Wall Street Journal’s Eliot Brown and Craig Karmin have the details:
…commercial property has become critical to its overall business. In 2011, real estate contributed $1 billion toward the private-equity firm’s $1.6 billion in pretax economic net income, a measure of profitability, according to securities filings…
Now, even as it continues to buy, Blackstone is poised to be among the market’s most active sellers as it starts to unwind some of those holdings. While the office-building portfolio could go first, other big deals are likely to follow.
The firm controls 80 million square feet of industrial property, one of the largest portfolios of its kind, and owns about 185,000 hotel rooms in the U.S., including the Hilton chain, more than any other hotel owner. It also has a sizable retail footprint, anchored by its 2011 acquisition of nearly 600 U.S. shopping centres from Australia’s Centro Properties.
WSJ notes that Blackstone’s CEO, Stephen Schwarzman, told analysts on a call back in February that “when we exit the real estate, my expectation is that we will really crush it and we will really do extremely well.”
The smart money is making its move.