Blackstone Real Estate Debt Strategies (“BREDS”), Blackstone
Real Estate Income Trust, Inc. (“BREIT”), Canada Pension Plan
Investment Board (“CPP Investments”) through its subsidiary CPPIB
Credit Investments III Inc., and funds affiliated with Rialto
Capital (“Rialto”) today announced that they have entered into a
newly formed joint venture with the Federal Deposit Insurance
Corporation (“FDIC”) and acquired a 20% equity stake for $1.2
billion in the venture which holds a $16.8 billion senior mortgage
loan portfolio retained in receivership following the failure of
Signature Bank. The FDIC is maintaining an 80% ownership stake in
the venture and provided financing equal to 50% of the venture’s
value.
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The commercial real estate loan portfolio comprises more than
2,600 first mortgage loans on retail, market rate multifamily and
office properties primarily located in the New York metropolitan
area. The loans are predominantly performing and encompass a wide
range of credit profiles. Approximately 90% of the loans are fixed
rate with low in-place coupons and strong in-place debt service
coverage.
Jonathan Pollack, Global Head of Blackstone Real Estate Credit,
said, “We are excited to invest in this compelling, large-scale
opportunity on behalf of our BREDS and BREIT investors.
Blackstone’s extraordinary real estate insights and credit
expertise positioned us to underwrite approximately $17 billion of
senior mortgage loans, allowing us to acquire the entire commercial
real estate loan portfolio at an attractive basis. We look forward
to working with our borrowers and our partners to maximize the
potential of these assets.”
Geoffrey Souter, Managing Director, Head of Real Assets Credit
at CPP Investments, said, “The current real estate credit market is
a promising source of long-term returns for the CPP Fund and we
look forward to exploring further opportunities to invest in this
and other capital-constrained sectors. This opportunity builds on
our longstanding partnership with Blackstone and is a testament to
CPP Investments’ expertise in real estate credit, demonstrating our
ability to transact quickly and at scale.”
Jay Mantz, President of Rialto Capital, added, “We are
incredibly excited to invest in this historic opportunity with two
of the most preeminent global investors, Blackstone and CPP
Investments. The Rialto team has managed loans through multiple CRE
market cycles, and we look forward to working with our partners to
maximize value for all stakeholders.”
Blackstone will be the lead asset manager of the portfolio and
Rialto Capital will act as the loan servicer and operating partner.
Blackstone is the largest owner of commercial real estate globally
and has originated or acquired more than $170 billion of real
estate loans and securities since the inception of its real estate
credit business. Rialto Capital has oversight of over $100 billion
of commercial real estate loans and has experience managing public
private partnerships.
CPP Investments invests in both public and private credit and
credit-like products globally, leveraging its ability to provide
scale, certainty of assets and a long investment horizon. As of
September 30, 2023, CPP Investments’ credit portfolio totaled C$75
billion, including investments across corporate, consumer and real
assets credit along the rating spectrum.
Advisors
Jones Lang LaSalle served as real estate advisor to Blackstone,
CPP Investments and Rialto Capital. Simpson Thacher & Bartlett
LLP; Gibson, Dunn & Crutcher LLP; Ropes & Gray LLP; Davis
Polk & Wardwell LLP and Bilzin Sumberg Baena Price &
Axelrod LLP served as legal advisors.
About Blackstone Real Estate
Blackstone is a global leader in real estate investing.
Blackstone’s real estate business was founded in 1991 and has US
$332 billion of investor capital under management. Blackstone is
the largest owner of commercial real estate globally, owning and
operating assets across every major geography and sector, including
logistics, residential, office, hospitality and retail. Our
opportunistic funds seek to acquire undermanaged, well-located
assets across the world. Blackstone’s Core+ business invests in
substantially stabilized real estate assets globally, through both
institutional strategies and strategies tailored for income-focused
individual investors including Blackstone Real Estate Income Trust,
Inc. (BREIT), a U.S. non-listed REIT, and Blackstone’s European
yield-oriented strategy. Blackstone Real Estate also operates one
of the leading global real estate debt businesses, providing
comprehensive financing solutions across the capital structure and
risk spectrum, including management of Blackstone Mortgage Trust
(NYSE: BXMT).
About CPP Investments
Canada Pension Plan Investment Board (CPP Investments™) is a
professional investment management organization that manages the
Fund in the best interest of the more than 21 million contributors
and beneficiaries of the Canada Pension Plan. In order to build
diversified portfolios of assets, investments are made around the
world in public equities, private equities, real estate,
infrastructure and fixed income. Headquartered in Toronto, with
offices in Hong Kong, London, Luxembourg, Mumbai, New York City,
San Francisco, São Paulo and Sydney, CPP Investments is governed
and managed independently of the Canada Pension Plan and at arm’s
length from governments. At September 30, 2023, the Fund totalled
C$576 billion. For more information, please visit
www.cppinvestments.com or follow us on LinkedIn, Instagram or on X
@CPPInvestments.
About Rialto Capital
Rialto is a fully integrated real estate investment and asset
management platform with a dedicated commercial real estate
servicer. With $15.9 billion of assets under management as of
September 30, 2023 and oversight of over $100 billion of real
estate loans as named special servicer, Rialto invests and manages
assets throughout the capital structure in real estate properties,
loans, and securities. The company is headquartered in Miami, FL
with offices in New York City, Santa Monica, and 9 other locations
across the US. For more information, please visit
rialtocapital.com.
Cautionary Note Regarding Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of the federal securities laws and the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements can be identified by the use of forward -looking
terminology such as “outlook,” “indicator,” “believes,” “expects,”
“potential,” “continues,” “identified,” “may,” “will,” “should,”
“seeks,” “approximately,” “predicts,” “intends,” “plans,”
“estimates,” “anticipates”, “confident,” “conviction” or other
similar words or the negatives thereof. These may include financial
estimates and their underlying assumptions, statements about plans,
objectives, intentions, and expectations with respect to
positioning, including the impact of macroeconomic trends and
market forces, future operations, repurchases, acquisitions, future
performance and statements regarding identified but not yet closed
acquisitions. Such forward-looking statements are inherently
uncertain and there are or may be important factors that could
cause actual outcomes or results to differ materially from those
indicated in such statements. These factors include but are not
limited to those described under the section entitled “Risk
Factors” in BREIT’s prospectus and annual report for the most
recent fiscal year, and any such updated factors included in
BREIT’s periodic filings with the SEC, which are accessible on the
SEC’s website at www.sec.gov. These factors should not be construed
as exhaustive and should be read in conjunction with the other
cautionary statements that are included herein (or in BREIT’s
public filings). Except as otherwise required by federal securities
laws, BREIT undertakes no obligation to publicly update or revise
any forward -looking statements, whether as a result of new
information, future developments or otherwise.
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Blackstone Jillian Kary 212-583-5379
Jillian.Kary@Blackstone.com
CPP Investments Asher Levine 929-208-7939
alevine@cppib.com
Rialto Capital Tom Scott 305-485-4196
Tom.scott@rialtocapital.com
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