Benzinga - by Piero Cingari, Benzinga Staff Writer.
Blackstone Inc. (NYSE:BX) President Jon Gray believes now is a good time to invest in commercial real estate, with discounted assets and potential for growth, suggesting investors to consider looking at the asset class.
Speaking with Bloomberg‘s Francine Lacqua during his attendance at the Bank of America Global Investor Summit conference in Rome, Gray emphasized the negative perception surrounding the real estate market contrasts with the actual opportunities that have arisen from the recent decline in values.
Commercial Real Estate: A Market Ripe for Investment According to Gray, the competition for purchasing discounted assets has not been particularly fierce, presenting a unique opportunity for those looking to invest. He stressed the imminent need for new capital as financial institutions begin to reckon with losses on loans made during periods of lower borrowing costs.
While he anticipates a surge in buying opportunities, including banks and insurance funds needing to sell at discounts, he reassured the situation is not as dire as the financial crisis witnessed years ago.
Blackstone, as Gray outlined, has been proactive in seizing these opportunities, notably stepping in to finance significant real estate deals.
An example of such involvement was Blackstone’s bid for a $17 billion portfolio of commercial-property loans from the Federal Deposit Insurance Corp.'s sale of Signature Bank debt, illustrating the firm’s aggressive approach to capitalizing market opportunities.
Blackstone Is Optimistic On CRE Outlook Under Gray’s leadership, Blackstone has grown significantly, establishing itself as a major player across various sectors of the economy.
The firm’s assets reached a milestone of $1 trillion in July 2023, securing its position as the world’s largest publicly traded alternative asset manager. With its shares experiencing an 83% surge last year, outperforming its peers and the S&P 500, Blackstone has demonstrated its robust strategy and market confidence.
A particular focus for Blackstone has been its $60 billion real estate trust for wealthy individuals, the Blackstone Real Estate Income Trust (BREIT).
Gray remains optimistic about the future, citing several factors that could further enhance the attractiveness of commercial real estate investment. These include anticipated rate cuts by the Federal Reserve, a decrease in new supply, and an improving environment for fundraising, despite a slower pace on the institutional side.
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Photo: Jason Dent on Unsplash
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