Blackstone opportunistic real estate posts 3.2% loss after valuation cap rate increases
The opportunistic arm was the only Blackstone unit to post a third-quarter loss; core-plus real estate gained 1.6%.
At a glance
Blackstone's opportunistic real estate segment posted a 3.2% loss in the third quarter, the only part of the firm to post a loss, according to company financial statements reported by The Real Deal.
Applying a higher cap rate to the same net operating income produces a lower valuation.
Core-plus real estate gained 1.6% in the quarter, according to PRED's earlier reporting.
Blackstone's opportunistic real estate segment posted a 3.2% loss in the third quarter, the only part of the firm to post a loss, according to company financial statements reported by The Real Deal.
President Jon Gray attributed the decline to higher interest rates. Blackstone raised valuation cap rates across its holdings in response to higher base rates, which led to depreciation in the opportunistic portfolio, he said, according to The Real Deal. That segment holds distressed assets and turnaround projects.
Applying a higher cap rate to the same net operating income produces a lower valuation.
Core-plus real estate gained 1.6% in the quarter, according to PRED's earlier reporting. Real estate AUM was about $309 billion, down from $314.2 billion. The arm drew $6.3 billion of inflows and realized $7 billion.
| Segment | Q3 performance | Source |
|---|---|---|
| Opportunistic real estate | -3.2% | Company financials, via The Real Deal |
| Core-plus real estate | +1.6% | PRED, Oct. 22 |
| Real estate AUM | ~$309B, from $314.2B | PRED, Oct. 22 |
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