Zhihong Xu, 29
Principal at Blackstone Real Estate Group
Zhihong Xu, who goes by Z, is living the American dream.
He was born in Hefei, a Chinese city a five-hour drive west of Shanghai, and moved to Pittsburgh when he was 5. He graduated from Yale University in 2016, and has been at Blackstone, the world’s largest alternative investment firm with $1 trillion in assets, for the last seven years.
After Blackstone bought GE Capital’s real estate book in 2015, the firm moved further into the commercial real estate space. Z began his career handling floating-rate debt originations for BREDS (Blackstone Real Estate Debt Strategies) and BXMT (Blackstone Mortgage Trust), but has since transitioned to build out the firm’s fixed-rate insurance lending capabilities. There he specializes in commercial mortgage loan originations on behalf of insurance clients
“That’s a growing part of what Blackstone and the BREDS business has been focused on over the last three to four years,” he said. “It’s a bucket of capital we have, where we can deploy money at a cheaper cost of capital on behalf of our insurance accounts.”
His strategic initiatives have included deal closings in Europe and the Asia-Pacific region this year.
But it hasn’t been all smooth sailing for Z and a corporate behemoth like Blackstone. He admits that the current interest rate environment has been “challenging,” and that while his first five years in the business had been “go-go-go,” the current lending climate has generated a decidedly more tempered day-to-day transaction environment.
“It’s a flow business,” he said. “Certainly, deals are more challenging to underwrite these days, sensitivity to credit is higher these days. Nevertheless, we’ve been fortunate and very active in the insurance space.”
Z noted that the present moment in CRE capital markets has made him appreciate the trust the firm has retained with its diverse list of clients.
“It’s a product of us having developed a really strong base of clients that call us on a repeat basis, and by ‘clients’ I mean our borrowers,” he said. “They’re calling us to help them find solutions in this volatility. With our insurance capital, and all of our capital, frankly, we’ve been able to be more creative in terms of the solutions we’re providing.”
