Blackstone's CRE Income Jumps 88% Y-O-Y

NEW YORK CITY-Blackstone Real Estate Partners has long been one of the Blackstone Group's strongest performers, and BREP's success in the second quarter was a key factor in the hedge fund giant's stellar Q2 results as announced Thursday morning. BREP's economic net income increased 88% year over year to $371 million, powering a more than threefold gain Y-O-Y in ENI to $703 million for Blackstone on the whole.

“In the second quarter, Blackstone doubled revenues and tripled earnings compared to a year ago, as good returns in every one of our businesses drove higher performance fees,” Stephen A. Schwarzman, Blackstone's chairman and CEO, says in a statement. “Robust realizations allowed us to generate significant returns for our fund investors and higher distributable earnings for our unitholders. These past three quarters have been the highest in distributable earnings since Blackstone went public six years ago.”

Overall carrying value of BREP investments appreciated 5.7% for Q2 and 11.9% year to date. In its earnings report, Blackstone attributed this to “continued positive real estate operating fundamentals across the office, hospitality and retail portfolios.”

Blackstone's real estate assets under management grew 27% Y-O-Y. Among the drivers were fundraising for several investment vehicles, the acquisition of what is now known as Blackstone Mortgage Trust and the subsequent $600-million secondary offering of BXMT, co-investment capital and market appreciation.

Further, the initial closing on BREP's latest debt strategies drawdown fund reached $2 billion, with a subsequent closing after Q2 ended on June 30 bringing the tally to $3.2 billion. Also during Q2, BREP's first-ever Asian real estate fund held its initial closing with $1.5 billion of total commitments.