Kathleen McCarthy and Nadeem Meghji

For Kathleen McCarthy and Nadeem Meghji, who anchor Blackstone’s $602 billion global commercial real estate investment strategy, 2024 was an inflection point. For the previous two years the cost of capital declined, which improved the debt market, and new construction collapsed, driving the price of real estate values up. 

“We were pretty vocal at the beginning of last year about this idea that values were bottoming, and that now is the time to deploy capital before we get the all-clear sign,” said Meghji.

Deploy doesn’t begin to seem like the right verb to describe Blackstone’s activity in 2024.

The firm invested $30 billion in equity capital globally last year, which comprised several privatizations of a dislocated commercial real estate marketplace. These included a $10 billion acquisition of AIR Communities, a REIT holding more than 27,000 multifamily units; a $3.5 billion privatization of Tricon Residential and its pipeline of single-family rentals in the U.S. and Canada; and a $4 billion privatization of Retail Opportunity Investments Corporation (ROIC), the largest grocery-anchored shopping center REIT in the U.S., holding a 10.5 million-square-foot portfolio. 

“We’re very constructive on not just what have traditionally been our core sectors of warehouses, apartments and data centers, but also now increasingly grocery-anchored retail and well-located, high-quality office,” said Meghji. “Our view is that values will be higher a year from now, and so this is really the moment where you’re supposed to be aggressive.” 

Then there is the fundraising component of Blackstone’s real estate business. Blackstone Real Estate Debt Strategies V (BREDS V) secured $8 billion in capital commitments, buttressing a debt strategy vehicle holding $77 billion of assets under management. Its Blackstone Real Estate Partners Europe VII (BREP Europe VII), closed a $10.6 billion fundraise, the single largest European real estate drawdown fund financed by third-party capital. 

“It all just speaks to investors concentrating their precious capital with managers, and us in particular, because we’ve proven through many cycles, with over 30 years of experience, the ability to deploy and protect capital and drive returns in any environment,” said McCarthy.