Ken Caplan (left) and Kathleen McCarthy (right).
Ken Caplan and Kathleen McCarthy
Global Co-Heads of Real Estate at Blackstone
Last year's rank: 1
A $550 billion global real estate portfolio that comprises some of the most coveted asset classes in some of the most competitive markets. Some of the most high-profile transactions in the industry. The firm everyone wants to do business with. The (unconfirmed) owners of a DeLorean time machine that allows it to visit the future commercial real estate landscape and act on trends before anyone else.
It’s gotta be Blackstone.
As the largest private owner of commercial real estate globally today, the firm consistently shows why it’s at the top of its game (and this list).
“We’re high-conviction, thematic investors, and we continued to lean into our highest conviction themes where we saw these strong, macro tailwinds,” Ken Caplan said of the past year’s activities.
Logistics, residential, life sciences, office and hotels represent around 80 percent of Blackstone’s global portfolio, as well as roughly 80 percent of its transaction activity over the past year.
“Those four sectors are where we continued to identify and action opportunities, and the scale and scope of our capital and experience allowed us to continue to find really compelling opportunities as we grew in each of those areas,” Caplan added.
Compelling indeed. As for notable deals? Settle in.
There was the $6 billion acquisition of Extended Stay America (together with Starwood Capital Group); the $3.1 billion purchase of WPT Industrial Real Estate Investment Trust; and, on the multifamily side, the $3.7 billion Resource REIT buy and the $3.6 billion purchase of Bluerock Residential Growth REIT, to name a few. And, those mammoth deals represent only a small portion of the firm’s activities.
Blackstone also expanded into new markets — for example, with its BioMed Realty’s acquisition of a 22-building life science and office campus in Boulder, Colo. — and dove deep into data centers with its $10 billion acquisition of QTS Realty Trust.
“Our competitive strengths anchor around our scale and our people,” Kathleen McCarthy said. “Our scale allows us to pursue larger and more complicated transactions, and to provide a ton of certainty to sellers. The scale of the information we have is also proving to be an incredible competitive advantage. We own over half a trillion dollars of commercial real estate globally and, going back to the very beginning of our business, we’re taking time to study the portfolio information we gather by transacting. We use that information to make the best decisions we possibly can about where to invest new capital and how to create value in the assets we have.”
On a single-asset basis, there were plenty of crown jewels to choose from, too. For example, the purchase of a 49 percent stake in One Manhattan West — the deal values the office building at $2.85 billion — and the $930 million purchase of the luxury rental building at 8 Spruce Street.
Then, who could forget the $5.65 billion sale of the Cosmopolitan Las Vegas? What happens in Vegas didn’t stay in Vegas, and the deal hit headlines across the world in September 2021 as a behemoth sale of a hospitality asset during the depths of COVID.
“For us, it’s a standout transaction because it really demonstrates — over the whole life cycle of an investment — the power of our investment model, and what we bring in creating value for our investors,” McCarthy said.
Indeed, after purchasing the Cosmopolitan for $1.7 billion in 2014, the firm installed a new management team, worked alongside unions to secure 3,000 jobs, and invested $500 million in different renovations, resulting in a $4 billion profit.
Outside of the list of mega-deals, Blackstone pursued transactions that were emblematic of its desire to drive positive change for the communities in which it invests. Specifically, it launched the $1 billion Choice Lease program to address housing affordability challenges, and partnered with Welcome.us to support resettlement of refugees, initially from Afghanistan, but now from Ukraine, too.