Louisiana Teachers commits $50m to Blackstone debt fund

Blackstone Real Estate Special Situation Fund II is targeting non-controlling debt and equity investments globally, raising roughly $750m to date.

The $11.9 billion Teachers' Retirement System of Louisiana has committed $50 million to Blackstone’s latest real estate debt fund.

The pension committed the capital to Blackstone Real Estate Special Situation Fund II (BRESSF II) during its investment committee meetings this week, according to a spokesman for the pension.

Blackstone’s real estate special situations team is targeting real estate-related securities, including mezzanine debt, publicly traded debt securities, whole loans, preferred equity, bridge equity, publicly traded equity securities and joint venture equity, the New York-based firm has previously said in a statement.

According to SEC filings, BRESSF II started fundraising in October last year and has raised at least $747.9 million to date through a variety of feeder funds. Its predecessor vehicle, BRESSF, raised at least $687.9 million across a variety of feeder vehicles raising capital from more than 40 investors. Fund I was targeting $1 billion, the filings added.

The firm has also raised $46.9 million for a CMBS vehicle, called Blackstone Real Estate CMBS Fund, the filings said. The vehicle was launched in May last year and was being sold by JPMorgan Securities.

Last February, Blackstone’s chief operating officer Tony James said the firm would focus on real estate debt and rescue financing, saying at the time: “We’re actually looking at some interesting things in areas that have already hit bottom but they, for the most part, take the form today of rescue financing.”

Blackstone has closed or agreed a number of debt-related deals in recent months, including a $209 million stalking horse bid for 134 senior living properties from bankrupt Sunwest Enterprise. In January, Blackstone – together with senior living operator Emeritus Corporation and hedge fund Columbia Pacific Management – signed a definitive agreement to pay $209 million cash and assume $945 million in debt for 134 Sunwest facilities across the US.

Last November, the firm acquired a majority stake in two US shopping malls by forming a joint venture with existing owner, Glimcher Realty Trust. The $320 million deal includes the assumption of about $218 million in mortgage loans secured against the Portland, Oregon and Tampa, Florida retail centres.