Katie Keenan.
Katie Keenan
President, Managing Director at Blackstone Mortgage Trust, Blackstone RE Debt Strategies
What’s been the biggest market lesson learned during COVID?
The pandemic has accelerated a number of trends that were already underway pre-COVID, such as the rise of content creation and the growth of e-commerce. Throughout the Blackstone (BX) Real Estate platform, we have always been high-conviction, thematic investors who invest at scale behind the asset classes and themes where we see secular shifts and strong tailwinds. In the [Blackstone Real Estate Debt Strategies] business, we’ve drawn upon this approach and focused on lending to strong, well-capitalized sponsors on high-quality assets supported by these dynamics. This strategy has been validated by the credit outperformance we’ve seen in our portfolio through COVID.
Are you bullish on New York City?
New York is a global city that has been through many challenges and has always bounced back. I believe the city’s vibrancy will re-emerge over time, after enduring short- to medium-term dislocation like so many places around the world. In other words, I believe this disruption is more cyclical than secular in nature.
What’s key to New York’s rebound and recovery?
New York has so many competitive advantages, from its culture to its talent to its dynamism, and those are not going away. New York will continue to be an attractive place to live and work for all the reasons it has been for so long.
How are you winning the deals for which you’re competing most aggressively today?
As part of the Blackstone Real Estate platform, we benefit from proprietary insights and [are] seeing a wide range of compelling investment opportunities. Additionally, our flexible capital allows us to deploy a variety of investment strategies. We have deep relationships in all segments of the real estate market. Our knowledge and experience investing through all types of market cycles allows us to provide certainty of execution to our borrowers.
How has your loan portfolio fared through the pandemic?
We’ve always focused on lending on high-quality, institutional assets that will hold their value over time. Additionally, we lend to top-tier sponsors who have the capital to see their investments through periods of dislocation. The benefits of this investment strategy and our active approach to asset management have led to very stable performance in our portfolio through the crisis. In Blackstone Mortgage Trust (BXMT), we have collected over 99 percent of our interest due with almost no interest deferral. Rent collections in our office, industrial and multifamily collateral are strong and sponsors continue to execute on their value-add business plans.
Which closed deal, post-COVID, are you most proud of and why?
BXMT recently closed a $1 billion CLO, and, in May and June, we accessed both the corporate debt and equity markets opportunistically to raise over $600 million of capital at attractive levels. BXMT’s exceptional access to the capital markets, even amidst the COVID-related volatility, is a powerful demonstration of the strength of the Blackstone platform.
What strengths do traditional lenders and non-traditional lenders bring to the market today?
Volatility and uncertainty require flexibility and conviction. We draw upon a deep reservoir of knowledge as one of the largest owners of real estate in the world, and also one of the market’s most active lenders. This experience allows us to be smarter and more nimble as an investor. We can craft deals that address our borrowers’ needs and address the current market constructively.
Is there more of an emphasis on underwriting or asset management today?
They go hand in hand. We have a robust in-house asset management team that is communicating constantly with our borrowers. We also have great market insights from our debt and equity platforms that allows us to underwrite deals with real-time data.
“When I’m not doing deals while working from home you’ll find me…”
“…constructing towers – out of blocks with my three-year-old.”
Lightning Round:
Favorite TV show you binged during quarantine?
“Home” on AppleTV. The escapism was wonderful.
Have you eaten inside a restaurant post-COVID, and if so, which one?
The outdoor dining options in Astoria and, increasingly, Midtown are wonderful. Outdoor dining is one of the small silver linings of COVID. I hope it sticks.
Any new hobbies taken up during COVID?
Managing two kids at the same time – I had a baby in early May!
Where is your COVID hideaway? (i.e., Hamptons or New York City or other?)
Hudson River Valley.
Number of haircuts in past six months – family trim or professional?
One professional, one family. YouTube is amazing.
Dream Zoom happy hour date?
Dr. Fauci.
Home office or actual office?
Actual office. In-person creativity and collaboration cannot be replicated on Zoom.
Have you been on a plane post-COVID? If so, where did you go? If not, where will you fly first?
Not yet. I can’t wait to go back to London and the West Coast.
Best book you read during COVID?
“Just Mercy” by Bryan Stevenson.
Which will rebound first: retail or hospitality?
Hospitality. We’re already seeing lots of demand for drive-to resorts. I think people are longing for an escape.
