Blackstone Buying REITs Amid Market Boom

Blackstone, a leading private equity firm, is actively buying REITs (Real Estate Investment Trusts) as the market continues to boom. This trend has significant implications for investors and the real estate industry as a whole.

Blackstone's move into REITs is driven by the growing demand for real estate investment opportunities. The firm has been actively acquiring REITs, including Equity Residential and Invitation Homes, to expand its portfolio.

The REIT market has seen a surge in recent years, driven by low interest rates and a strong economy. This has led to increased investor interest in REITs, making them an attractive target for firms like Blackstone.

Blackstone's acquisition of Equity Residential, a leading apartment REIT, has been particularly notable. The deal has given Blackstone a significant presence in the multifamily housing market.

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Blackstone has agreed to pay $187.50 per share in cash for PS Business Parks, a roughly 15% premium to its average share price over the last two months. This deal values the industrial REIT at $7.6 billion.

The company plans to invest more than $400 million to maintain and improve the acquired communities, with the potential for further capital to support growth. Blackstone has also raised an enormous amount of money to go shopping, with billions of dollars in dry powder across its real estate private equity funds.

Blackstone's latest acquisition, PS Business Parks, will provide an unexpected windfall to shareholders of Public Storage, who will receive about $2.7 billion in cash when the deal closes.

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Blackstone Real Estate has completed its acquisition of Apartment Income REIT Corp. (AIR Communities) for $10 billion.

The acquisition price reflects a 25% premium over AIR Communities’ share price as of April 5.

Blackstone acquired all outstanding common shares of AIR Communities for $39.12 per share in an all-cash transaction.

AIR Communities owns 76 rental housing communities in major coastal markets.

Blackstone intends to invest more than $400 million to maintain and improve these communities.

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Blackstone is a global leader in real estate investing, managing $337 billion in investor capital.

The firm's diverse portfolio includes logistics, residential, office, hospitality, and retail assets.

Blackstone's real estate strategy focuses on acquiring under-managed assets and investing in stabilized real estate.

The acquisition is a major deal that will take the publicly traded real estate investment trust private.

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Blackstone is buying PS Business Parks for $7.6 billion, a 15% premium to its average share price over the last two months.

The deal values the industrial REIT at $7.6 billion and will give Blackstone a large-scale portfolio of high-quality, flexible real estate in some of the country's best markets.

PS Business Parks currently owns 97 business parks with 28.1 million square feet of commercial space leased to about 5,100 tenants.

It primarily caters to smaller businesses that need flex space or some warehouse space, focusing mainly on major coastal markets like Southern California, Miami, Washington, DC, and Texas.

Public Storage, which owns 41% of PS Business Parks' equity, will receive about $2.7 billion in cash when the deal closes and recognize a $2.3 billion after-tax gain.

This unexpected windfall will allow Public Storage to distribute the gain to its shareholders.

Blackstone's latest deal is just the latest in a series of multi-billion-dollar purchases of real estate investment trusts (REITs).

The private-equity giant has raised an enormous amount of money to go shopping and will likely continue its real estate shopping spree.

With billions of dollars in dry powder across its real estate private equity funds and cash continuing to pour into its funds, Blackstone is well-positioned to make more big deals.

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Blackstone has a significant amount of dry powder to continue buying real estate, with $36.3 billion remaining after deploying $47.2 billion of its $83.7 billion in investments over the past 12 months.

Its non-traded REIT, Blackstone Real Estate Income Trust (BREIT), has dominated capital raising in the sector, pulling in over $24 billion in the past year.

Blackstone's growing reputation for delivering top-tier returns has led to a steady influx of cash into BREIT's coffers, allowing it to continue putting money to work.

The company has already struck agreements to acquire several REITs, including a $12.8 billion deal for student housing-focused residential REIT American Campus Communities.

Large-scale transactions, such as taking publicly traded REITs private, are an effective way for Blackstone to deploy sizable amounts of its dry powder.

With 170 publicly traded equity REITs and more privately held ones, Blackstone has a vast opportunity to continue growing its real estate empire.

Blackstone's recent deals will utilize some of its remaining dry powder, but additional money is likely to continue flowing into its coffers.

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Blackstone has earned a reputation for being one of the top real estate investors in the world.

More investors are entrusting it with more of their capital, giving it the funds to acquire more real estate.

It still has a lot of dry powder after its latest deal, suggesting its shopping REIT shopping spree could continue.

Blackstone's appetite for REITs is nearly insatiable, making it a dominant force in the market.

This trend is likely to continue, as investors continue to seek out Blackstone's expertise and track record in the real estate sector.

Blackstone has agreed to pay $187.50 per share in cash for PS Business Parks, a roughly 15% premium to its average share price over the last two months.

The deal values the industrial REIT at $7.6 billion, making it a significant acquisition for Blackstone.

Blackstone is buying another real estate investment trust (REIT) with its $3.7 billion acquisition of Resource REIT, a non-traded REIT focused on owning apartment buildings.

Public Storage, which owns 41% of PS Business Parks' equity, will receive about $2.7 billion in cash when the deal closes.

Blackstone's shopping spree is driven by its ability to raise an enormous amount of money to go shopping.

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Blackstone acquiring AIRC at $39.12 is a huge premium, 24.8% above the prior closing price of $31.35.

This price is also 92.6% of the consensus NAV estimate, indicating that Blackstone is buying the REIT below its net asset value.

The REIT still has some debt locked in, with a 4.3% weighted-average rate and 6.5 year weighted-average maturity.

This debt rate is not particularly cheap, but it's still lower than the financing available in the market today.

The deal is beneficial to investors on both sides, and it reminds the market that apartment REITs still have value.

Many apartment REITs have been trading at material discounts to NAV, which can provide some support for values.

Here are some examples of how the market is reacting to the deal:

Among the apartment REITs, we are long AVB and CPT, as they have shown significant gains in response to the deal.

Blackstone has been on a shopping spree, making several acquisitions in the real estate sector.

The company's non-traded REIT, BREIT, has raised over $22 billion in investor capital last year, giving it a significant amount of firepower to make acquisitions.

Blackstone's real estate investing strategy focuses on thematic investing, targeting areas with significant demand tailwinds driving growth in rental rates and property values.

The company sees a lot of growth ahead for multifamily properties in the Sun Belt region, where continued migration is expected to drive above-average rent growth.

Blackstone is willing to pay a high premium for high-quality multifamily communities in fast-growing markets, as it believes in their long-term upside potential.

The company's acquisition of PS Business Parks, a roughly 15% premium to its average share price, values the industrial REIT at $7.6 billion.

This deal will give Blackstone a large-scale portfolio of high-quality, flexible real estate in some of the country's best markets.

Public Storage, the parent company of PS Business Parks, will receive about $2.7 billion in cash and recognize a $2.3 billion after-tax gain from the deal.

Blackstone's acquisition binge is driven by the success of BREIT, which has raised a significant amount of investor capital in recent years.

The company's focus on thematic investing has allowed it to identify areas with significant growth potential, such as multifamily properties in the Sun Belt region.

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