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Blackstone raises $478m for non-listed REIT

The investment firm just closed on the acquisition of a $430m multifamily portfolio from TA Realty on behalf of the vehicle.

Blackstone raised $478 million for its non-traded real estate investment trust in the first quarter of 2017, according to its earnings results released Thursday.

The New York-based firm launched Blackstone Real Estate Income Trust in August to focus on core properties. The REIT made its first purchase in January, the Hyatt Place UC Davis, for $32.2 million. Additional purchases for the REIT include an industrial portfolio for $402 million and, earlier this week, a six-property, 2,514-unit multifamily portfolio from TA Realty for $430 million, PERE previously reported. In that deal, the firm bought apartments in Orlando, Chicago, Dallas and Kansas City, Kansas, all built since 2000, according to an SEC filing. The communities had an average occupancy rate of 93 percent and average per-unit monthly rent of $1,404.

BREIT is an extension of Blackstone's core-plus business, Blackstone Property Partners. The open-ended fund for institutional investors, launched in July 2014, had $14.1 billion in committed capital as of March 31, and had a 13 percent net internal rate of return, the same return as in the fourth quarter.

Blackstone reported $6.7 billion of realization activity in its real estate business, nearly double that of the $3.5 billion in dispositions during the previous quarter. The firm’s major first-quarter realizations included the sale of a 25 percent stake in Hilton for $6.5 billion and the $2.3 billion disposition of a Japanese residential property portfolio, along with the $1.8 billion initial public offering for Invitation Homes, the firm’s single-family rental platform.

Separately, Blackstone’s president Tony James discussed trends across its real estate platform, including e-commerce-driven logistics and urbanization.

“We’ve been a big beneficiary because of the last-mile logistics that e-commerce companies require,” James said on Thursday’s analyst call.

He noted the company is not invested in any enclosed malls in the US, which face headwinds from struggling retailers. Instead, Blackstone has invested in grocery-anchored shopping centers, among other retail property types. Retail comprises between 5-6 percent of the firm’s overall real estate portfolio, he said.

“There are going to be winners and losers within the retail sector,” James said. “People still go to grocery stores and still need local markets.”

In the first quarter, real estate assets under management nudged up to $102.1 billion, compared with $101.9 billion at the end of the fourth quarter. Overall, Blackstone managed $368.2 billion, compared with $366.6 billion last quarter.