Blackstone REIT Locks in $1.1B CMBS Loan on Multifamily Portfolio

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Blackstone Real Estate Income Trust (BREIT) has secured almost $1.1 billion in debt to refinance a collection of 13 multifamily properties, according to ratings agency analysis of the portfolio and the transaction.

Bank of America, Wells Fargo and Société Générale co-originated the fully-extended, five-year interest-only and floating-rate commercial mortgage-backed securities (CMBS) loan. The financing is collateralized by BREIT’s fee-simple interests in the assets in the portfolio, which sports almost 5,450 apartment units, according to data from S&P Global Ratings. The loan closed on Sept. 30.

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The market-rate rental portfolio includes a mix of garden-style communities and mid- and high-rise apartment buildings within nine markets across the Sun Belt, Midwest, West Coast and western region, according to S&P. Four properties are located in Florida, including one 228-unit student housing development in Orlando; three are in Georgia; two are in Texas; and there’s one each in Nevada, Colorado, California and Ohio.

S&P wrote that the portfolio’s “geographic diversity” is a plus for cashflows, and that it “believe[s] most properties exhibit Class A qualities.” The assets feature typical multifamily amenities, such as swimming pools, fitness centers and business centers.

The 13 properties were resilient through the pandemic, and as of September, the portfolio’s occupancy rate has jumped to almost 96 percent, from about 91 percent in all of 2020, per S&P. Net cash flows within the portfolio have also increased each year since 2018.

Average in-place monthly rents for units within the bundle — around $1,578, as of September — is under the 2021 year-to-date average submarket monthly rent of $1,691, according to S&P, which cited rental data from CoStar Group. S&P wrote that it believes there’s room to increase rent levels for the assets in the portfolio to the submarket rent levels reported by CoStar.

Representatives for Wells Fargo, Bank of America and Société Générale did not immediately respond to a request for comment.

Mack Burke can be reached at mburke@commercialobserver.com