Blackstone says real estate has bottomed
Back in the 1900s, banker Nathan Rothschild famously said, “The time to buy is when there’s blood in the streets.” Fast forward 100 years, and Blackstone, owner of the world’s largest real estate fund, echoes a similar (although less exciting) message for real estate skeptics: the market has hit its lowest point, and it’s time to buy.
- According to Blackstone President Jon Gray, there’s limited competition for snagging “discounted assets” — making it easier to find good deals.
- Gray also notes that borrowing costs and spreads are dropping, and there’s a decrease in new construction projects worldwide.
Plenty of opportunities: Despite concerns about souring loans, Blackstone is optimistic about commercial real estate (CRE) and sees it as a “positive” for its fund. But CRE is full of deals… and Blackstone isn’t the only one jumping at discounts. Private equity firm KKR says its real estate credit pipeline had swelled to $15B in February, a ~33% increase from the 2023 average — a strong vote of confidence from real estate investors.
