NEW YORK CITY-The Blackstone Group said Monday its real estate debt investment business, Blackstone Real Estate Debt Strategies, has closed its most recent fund at $3.5 billion. Blackstone Real Estate Special Situations Fund II, which closed on Feb. 1, is intended to provide “urgently needed debt capital to the commercial real estate industry as it begins its recovery,” according to a release.
“As real estate markets begin their recovery, Blackstone is uniquely positioned to meet an increasing demand for debt capital to recapitalize legacy assets and acquire new assets,” says Michael Nash, senior managing director of the Blackstone Group and chief investment officer of BREDS, in the release. The closing of the latest debt strategies fund occurs as Blackstone is raising its profile in the commercial real estate sector generally, including last month’s $9.4-billion purchase of the Centro Group’s 588 US retail assets.
Recent transactions through BREDS include providing mezzanine loans that facilitated a pair of Manhattan deals: RLJ Development’s acquisition of the Doubletree Metropolitan Hotel and Savanna Partners’ acquisition and recapitalization of 1375 Broadway. The group also provided mezz financing for Republic Properties Corp.’s recapitalization of its 25 Massachusetts Ave. office building in Washington, DC, as well as enabling the refinancing of the Four Seasons Austin and Miami Airport Corporate Center.
When the private equity giant announced its 2010 year-end results in February, it announced plans to start fundraising for its next real estate opportunity fund later this year. In an earnings call, the firm said the new fund would be comparable in size to the $10.9-billion BREP VI.
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