Blackstone's six Blackjack apartment properties enter special servicing after 15 communities sold

Six Blackstone apartment properties totaling 1,842 units have moved to special servicing after the firm sold 15 other communities, Multifamily Dive reported. The sales and the subsequent transfer both trace to a single $1.3 billion loan.

The Blackjack Portfolio held 6,671 units across seven states and 10 markets when the loan was originated in October 2021, according to Morningstar data cited by Multifamily Dive. Fifteen communities were sold, leaving the six below.

The remaining assets range from 181 units at Marlowe in Seattle to 380 units at Hue Watercolor Place in Bradenton, Florida. Two of the six, Ascent and Marlowe, are in Seattle.

The transfer follows a rise in multifamily CMBS distress: according to Trepp, the multifamily special servicing rate rose 17 basis points to 8.54% in September and the delinquency rate rose 35 basis points to 8.04%. Trepp also lists multifamily behind office and retail in hard CMBS maturities due in October; it accounts for 51.86% of the “severely impaired balance” the firm tracks.

Multifamily Dive framed Blackstone as facing the same problem as other owners who financed at the top of the market in 2021 and 2022. Ian Symington, vice president and head of acquisitions at Lion Real Estate Group, told the publication that lenders weighing 2021-22 vintage loans may decide “to rip the bandage off as opposed to extending with current sponsors” if they expect higher-for-longer rates and flat property operations.

Alexan 20th St. Station accounts for 354 of the remaining units in Denver, where $3.83 billion of multifamily debt sits on watchlists per Trepp data this publication reported this month.

Multifamily Dive's report does not disclose the remaining loan balance after the 15 sales, the loan's rate or maturity, or whether the special servicer has discussed next steps with Blackstone.

The reporting does not indicate Blackstone has defaulted or stopped funding the assets. A servicing transfer is an administrative event that precedes those outcomes and does not by itself establish any of them.