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NEW YORK CITY-The Blackstone Group has closed on a fund that, according to the company, is the largest real estate opportunity fund ever raised. Blackstone Real Estate Partners V has capital commitments totaling $5.25 billion. When paired with an international fund, BREP International II, Blackstone has a pool of available capital aggregating more than $7 billion.

The firm now lays claim to the world's largest pool of capital for real estate opportunity investing. Blackstone has raised a total of seven real estate funds since inception, five for general investing and two with a specific focus on Western Europe, with total capital of approximately $12.7 billion. "We have a solid pipeline of potential real estate investments both in Europe and North America and this new fund will give us the resources to take full advantage of those opportunities," Chad Pike, senior managing director and the London-based co-head of Blackstone's Real Estate Group, says.

Jonathan Gray, senior managing director and the New York City-based co-head of Blackstone's Real Estate group, says the fund closing is a "very significant vote of confidence from our investors in our group's ability to identify and complete profitable transactions." Earlier this week, the firm paired with Brookfield Properties in a nearly $9-billion deal for the Chicago-based Trizec. The joint venture will be financed with property and corporate debt, contributions of equity of $1.3 billion by Brookfield and institutional partners selected by it and the balance of the equity by Blackstone. Brookfield's expected equity commitment, after syndication to institutional partners, is expected to be approximately $450 million. "Trizec represents a tremendous opportunity to further our investment in the US office market recovery," Gray says.

The Real Estate Group has completed 10 public-to-private transactions including Wyndham, La Quinta, Meristar, NHP, Hospitality Europe and CarrAmerica in just the past two years. Over the past 12 years the group has completed more than 180 separate investments in North America and Europe with a total transaction value of approximately $50 billion. Park Hill Real Estate Group acted as placement agent in the raising of BREP V.

Instant Insights /

Blackstone Group Accumulates $7B Pool

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