Blackstone has closed its most recent real estate debt fund, Blackstone Real Estate Debt Strategies V — one of the largest private commercial property lending sources in the world — with $8 billion of total capital commitments.
Funds that finance property deals or buy existing loans have stood out as a bright spot in a difficult environment for raising cash that’s been plagued by high interest rates.
In the second half of last year, major private equity firms reported a rebound in capital raises across most of their investment strategies, with commercial real estate lending performing best, as a void has been left by traditional banks reducing property financing.
Blackstone Real Estate Debt Strategies V, established in October 2022, saw about $3 billion of its haul come in since July when the fund last reported capital raising with the Securities and Exchange Commission.
At that time, the fund reported raising money from just 16 outside investors globally. One of its largest commitments came from the California Public Employees' Retirement System, which committed $1.5 billion last summer, according to CalPERS records.
CalPERS reported an immediate jump in its fund value from the investment. By the end of September, the pension said it paid $226.6 million of its commitment to Blackstone with a value of that capital at $237.7 million, an increase of nearly 5%.
Another investor, the School Employees Retirement System of Ohio, reported a 5.56% return for its paid-in capital for the fourth quarter. The fund committed $40 million and had paid in $6 million, according to the system’s data.
Blackstone said its fifth real estate debt fund has flexible capital to invest around the world. The New York-based private equity firm’s real estate debt strategies primarily target commercial property mezzanine loans as well as debt securities.
Blackstone did not immediately respond to CoStar News' request for additional information.
Among its commercial property lending, the fund loaned $157.4 million for Lincoln Property Co. and SVP Global's acquisition of the two-building The Bluffs office park in Playa Vista, California, according to CoStar data.
Blackstone real estate debt funds have $77 billion of assets under management and over 170 professionals globally.
The firm’s larger real estate business was founded in 1991 and has $315 billion of investor capital under management. It is the largest owner of commercial real estate globally, owning and operating assets across every major geography and sector, including logistics, data centers, residential, offices and hotels.