Latest news with #BREDSV
Yahoo
15-05-2025
- Business
- Yahoo
Distressed Commercial Real Estate Is In The Cross Hairs Of Brookfield Asset Management, Which Has A $16 Billion War Chest For Purchases
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. In one of the largest quarterly fundraising efforts by a real estate company, Brookfield Asset Management (NYSE:BAM) has raised $5.9 billion through distressed commercial real estate, bringing its total war chest to $16 billion, The Wall Street Journal reports. The fallout of rising interest rates has hit commercial property owners especially hard, and lenders are now pressuring them to sell, often at deep discounts, the Journal writes. Thus, real estate investment firms such as Brookfield have been sourcing fundraising efforts from institutional lenders, pension funds and endowments to take advantage. Don't Miss: Inspired by Uber and Airbnb – Deloitte's fastest-growing software company is transforming 7 billion smartphones into income-generating assets – Invest Where It Hurts — And Help Millions Heal: "We're buying at much lower prices than we would have a few years ago," Lowell Baron, chief investment officer of Brookfield's real-estate group, told the Journal. The $16 million haul that Brookfield has is the largest ever in the company's history. The Journal reports that they plan to raise another $2 billion before the fund closes. Formerly based in Toronto, Brookfield relocated to New York in 2024 and has thus far invested a quarter of its fund in apartment buildings and warehouses at discounts of 20%- 40% from peak prices. Private-equity real estate firms have found investors willing to get involved in large raises recently. According to real estate data and analytics firm Private Equity Real Estate, investors raised $57.1 billion in the first quarter, a vast increase from the $32.5 billion raised over the same period in 2024. Trending: , which provides access to a pool of short-term loans backed by residential real estate with just a $100 minimum. In March, private-equity giant Blackstone (NYSE:BX) announced an $8 billion final close for its latest fund, BREDS V, to buy distressed commercial real estate in the U.S., Europe and Australia. Debt funds such as those raised by Blackstone and Brookfield became more prevalent after the 2008 global financial crisis, when traditional banks became skittish about real estate lending, the Journal reported. However, following the surge in interest rates in 2022 to curb inflation, private equity encountered difficulties in raising funds for real estate. While Brookfield has already invested some of its money in distressed San Francisco apartment buildings, industrial real estate is also an attractive asset class, particularly multi-tenant spaces, according to Globest. Multi-tenant industrial spaces saw a 5.8% gain in Q1 compared to the same time last year. Cap rates in multi-tenant spaces tend to rise more sharply than those in single-tenant spaces, Globest reports. This was particularly true in the Midwest and Southwest, where rates climbed to 7.57% and 6.21%, respectively. The rise in occupancy and rents, Globest reports, is being driven by e-commerce expansion, supply chain retooling, and last-mile distribution growth. Investors are thought to prefer multi-tenant spaces because they offer a hedge against financial uncertainty due to their relative stability and cash flow. Read Next: Nancy Pelosi Invested $5 Million In An AI Company Last Year — With Point, you can Image: Shutterstock Send To MSN: 0 This article Distressed Commercial Real Estate Is In The Cross Hairs Of Brookfield Asset Management, Which Has A $16 Billion War Chest For Purchases originally appeared on
Yahoo
16-03-2025
- Business
- Yahoo
Blackstone Raises An $8 Billion Fund To Invest In Commercial Real Estate To Buy Debt Portfolios From Banks And Insurance Companies
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Private equity juggernaut Blackstone (NYSE:BX) has matched its own record for a commercial real-estate debt fund by closing on a $8 billion deal. It's a further indication of the sector's rebound, The Wall Street Journal reported. In a company statement, Tim Johnson, global head of Blackstone real estate debt strategies, said, 'We are extraordinarily appreciative of our investors for allocating this amount of capital during this period of market dislocation. We could not be more enthusiastic about the opportunities ahead and with the support of the largest owner of commercial real estate as well as the largest alternative real estate credit platform in the world, BREDS V is well-positioned to deliver in this attractive vintage.' Don't Miss:Many don't know there are tax benefits when buying a unit as an investment — The fund — Blackstone Real Estate Debt Strategies V — which took two years to raise, will be active in North America, Europe, and Australia. The only other time Blackstone raised $8 billion for a real-estate debt fund was in September 2020. They are among the private-equity firms that stepped in to fill the gap after the financial crash of 2008 when traditional lenders became skittish about backing real estate. Complicating issues, however, has been the rise in interest rates as commercial real estate is traditionally very leveraged. According to data firm Preqin, despite a drop in global real estate fundraising by private equity firms in recent years, the Blackstone deal is a sign of commercial real estate recovery, with commercial mortgage-backed securities up nearly three times as much in 2024 compared with 2023. Trending: CEO of Integris gathered a team of senior investment managers who have $34.22 billion in combined owned and managed assets in the West Coast — Blackstone both buys existing loans and makes loans with its real estate fund, often partnering with commercial banks when loaning money, with banks taking on the senior less risky, higher performing part of the loan. Regarding the changing winds of commercial real estate, Al Brooks, vice chair of commercial banking at JP Morgan Chase (NYSE:JPM) recently said: 'The 2025 commercial real estate outlook is largely optimistic, with robust performance in the industrial sector and steady retail growth. While climate change concerns, cybersecurity threats, and interest rate uncertainty persist, opportunities in affordable housing and public-private relationships offer promise for growth and innovation.'The return-to-office mandates issued by major companies is also a boost to commercial real estate. Reuters reported that Blackstone is scouting for office properties in New York and San Francisco, quoting Blackstone President Jonathan Gray, who said at a conference: 'In New York, you have financial services firms who are growing rapidly, you don't have any new building. In San Francisco, the values fell very hard, in some cases 75%, and AI and technology innovation really (are) housed in San Francisco.' Blackstone sees the market as ripe for taking loans from troubled borrowers and lenders who might want to reduce the size of their real-estate debt portfolios or face the expiration of low-interest rate loans and thus have an asset that will drop in value once the rate increases. 'That's not a loan a bank wants to refinance dollar for dollar,' Johnson said. 'Someone has to step in and fill that gap.' . With over $1 million in dividends paid out last quarter and a growing selection of properties across various markets, Arrived offers an attractive alternative for investors seeking to build a diversified real estate portfolio. In October 2024, Arrived sold The Centennial, achieving a total return of 34.7% (11.2% average annual returns) for investors. Arrived aims to continue delivering similar value across our portfolio through careful market selection, attentive property management, and thoughtful timing in sales. Looking for fractional real estate investment opportunities? The features the latest offerings. This article Blackstone Raises An $8 Billion Fund To Invest In Commercial Real Estate To Buy Debt Portfolios From Banks And Insurance Companies originally appeared on Sign in to access your portfolio
