Blackstone has closed an $8 billion real estate debt fund, the firm said on Friday. The vehicle is only the second of its kind to secure a total capital commitment of that size.
Blackstone Real Estate Debt Strategies V will target corporate credit, liquid securities, global scale lending and structured solutions for banks, insurance and mortgage companies in North America, Europe and Australia.
The fund was raised over a period of two years, the Wall Street Journal reported. BREDS V buys and makes property loans alongside banks and insurance companies, some of which are trying to alleviate their debt amid a wall of loan maturities, the Journal noted, adding that banks take on senior tranches of the capital stack while Blackstone assumes higher-yield segments.
According to the Mortgage Bankers Association, $957 billion of outstanding commercial mortgages, representing 20 percent of the total, will mature this year. CMBS delinquency rates have increased for the past six months.
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At present, the Blackstone’s Real Estate Debt Strategies business has more than $77 billion worth of assets under management. In 2020, Blackstone closed the only other commercial real estate debt fund to reach $8 billion in commitments.
A fundraising standout
Blackstone’s announcement follows a protracted slump in capital raising and transaction activity. As of the third quarter, 2024 had the lowest commercial property transaction volume since 2013, Altus Group data shows. Private Equity International reports that the $746 billion in private equity closed was the lowest amount since the beginning of the pandemic.
Friday’s announcement follows another recent ten-figure transaction by Blackstone. In February, the firm completed a $4 billion all-cash merger with Retail Opportunity Investments Corp. that took the REIT private.