Blackstone Inc (NYSE: NYSE:BX) is the largest owner of commercial real estate globally, owning and operating assets across every major geography and sector managing $319 billion of investor capital with $577 billion in its global real estate portfolio.
Kathleen McCarthy, senior managing director and global co-head of Blackstone’s real estate sector, spoke at Urban Land Institute's annual fall meeting last Tuesday, where she outlined her property preferences that would generate the most cash flow in the current uncertain housing environment.
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"We are in a great sector for an environment like this," McCarthy said. "In an environment where costs are rising and you need to generate cash flow growth, real estate is a great place to be overall."
McCarthy continued, "real estate today is in a better place than it's been than other economic environments, we never got back to those heavy levels of new construction or lending on new speculative construction."
Blackstone Real Estate is continuing to concentrate on asset classes that offer tailwinds and in which changes in the overall economy fuel demand for those assets.
About 80% of the company's real estate assets, according to the senior managing director, are centered on data centers, hotels, lab office spaces, rental homes, and warehouses, all of which will benefit from the future expected limited supply.
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Here is a quick rundown of some of the property categories that Blackstone Real Estate focuses on:
Industrial
- For more than 12 years, industrial has been the theme of Blacksone's strongest conviction, according to McCarthy.
- Focus area: Student housing. American Campus Communities' $13 billion acquisition by Blackstone just came to an end.
- According to McCarthy, Blackstone continues to have "strong conviction" in this section of the real estate market, which was disrupted by the pandemic.