Blackstone group (s 0.18%) She made headlines again this week by making another big boost in the real estate market. This time, a leading alternative asset manager has taken a look at it American Campus CommunitiesA real estate investment trust (REIT) focused on student housing. The nearly $13 billion deal is the latest in a string of deals that have grabbed headlines for the company.
It has become a dominant force in the real estate industry. Here’s a closer look at how the Blackstone Group compares to its competitors in the real estate sector.
Image source: Getty Images.
Giant among alternative asset managers
Blackstone is the world’s largest asset management company. It has $881 billion in assets under management in four main areas: real estate, private equity, hedge fund solutions, and credit and insurance.
Real estate is its largest area of focus, with invested capital of $279 billion across a global real estate portfolio of $514 billion. This makes it the world leader in real estate investment:
Data source: company websites. Scheme by the author.
Blackstone has been flaunting real estate over the past year, striking several deals that grabbed the headlines:
- REIT . data center QTS Realty for $10 billion
- Home Partners of America Single-Family Home Rental Platform for $6 Billion
- Industrial REIT WPT Industrial Real Estate Investment Fund $3.1 billion
- Flat focus Residential real estate Blurock Residential Growth Fund For $3.6 billion
- uncirculated REIT Resource REIT Apartment for $3.7 Billion
- REIT . Apartment Preferred Residential Communities for $5.8 billion
- US Campus Communities for $12.8 Billion
Many of these deals have yet to be closed. When they do, they will expand Blackstone’s progress Brookfield Asset Management (Bam 1.17%)Starwood Capital, and KKR (KKR 1.57%).
Taking private real estate to retail investors
One of the main drivers of Blackstone’s real estate shopping spree has been its success in raising capital from retail investors over the past year. Blackstone set up a non-traded fund, the Blackstone Real Estate Income Fund (BREIT), five years ago to appeal to retail investors who wanted access to the private real estate market.
It was a resounding success. Blackstone’s ability to generate huge returns for BREIT investors has made it attractive to investor capital over the past year:
Data source: Stanger Investment Banking. Scheme by the author.
blackstone Brit It raised 68.4% of the total capital acquired by non-traded REITs last year, averaging $2 billion per month. Blackstone’s large reach is leading more alternative asset managers to launch competitive, unquoted REITs targeting retail investors.
KKR launched its non-commercial REIT fund – KKR Real Estate Select Securities, or KREST – in May 2021. Meanwhile, Brookfield took over the advisory role of Oaktree non-traded fund REIT in November by seeding new assets and renaming it Brookfield REIT.
However, Blackstone’s non-traded REITs stand out from the pack due to their success in generating returns. It has outperformed all other non-traded REITs with a total return of 30.2% over the past year.
A big driver has been its strategy to invest in high-conviction topics such as data spread, Sun Belt migration, affordable housing, and e-commerce. Its ability to generate huge returns from those trendy topics has enabled it to raise more money from investors. This gives it the capital to make larger acquisitions, allowing it to increase returns through its growing size.
Blackstone’s success drives its growth
Blackstone is one of the biggest names in real estate. An objective investment approach has enabled the company to generate solid returns, which has made investors trust it with more money. This allows her to acquire more real estate, thus strengthening her dominance over real estate.