Blackstone Buys Affordable Housing Portfolio Stake for $5.1B

Earlier this year the private equity giant acquired a $1 billion housing portfolio in San Diego that it plans to keep affordable.

The headline news from Blackstone and American International Group is that Blackstone is acquiring a 9.9% equity stake in AIG’s Life & Retirement business for $2.2 billion in an all cash transaction.

But the two companies also struck a separate deal announced at the same time in which Blackstone Real Estate Income Trust is acquiring AIG’s interest in a US affordable housing portfolio for $5.1 billion, also for cash. This transaction, subject to customary closing conditions, is expected to close in the fourth quarter of 2021.

The affordable housing assets are no longer a core play for AIG, says Peter Zaffino, president and CEO of AIG. “We believe Blackstone has the right expertise and commitment to stakeholders to manage these assets going forward.” 

BREIT plans to make investments to the assets while still keeping them affordable, says Kathleen McCarthy, global co-head of Blackstone Real Estate.

The private equity giant has been making steady investments in the single-family rental housing space, but is also carving out a position in affordable housing. In May it announced plans to purchase a 66-property apartment portfolio from Conrad Prebys Foundation for $1 billion, according to the San Diego Tribune. It told the paper at the time that it planned to keep most of the rentals affordable for residents who make 80% or less of the area median income.