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Blackstone Shrinks Quarterly RE Losses

NEW YORK CITY-Declining values in the company's real estate portfolio drove losses in this segment, but Q2 overall was the first profitable quarter in a year.

By Paul Bubny | Updated on August 06, 2009

NEW YORK CITY-Declining values drove a year-over-year drop in six-month revenues for the Blackstone Group’s real estate segment, the private-equity company reported on Thursday. However, the segment’s second-quarter loss was a fraction of the losses incurred in the first three months of 2009, and overall the company swung to its first quarterly profit in a year.

The real estate segment had negative revenues of $231.5 million for the six months ended June 30, compared to positive revenues of $34 million the year prior, according to Blackstone’s Q2 report. On a quarter-to-quarter basis, Q2 losses shrank to $18.9 million from $212.6 million in Q1. Similarly, net income for the segment improved to negative $25.1 million for Q2 from negative $187.9 million in Q1 and negative $59.1 million in Q2 2008.

A notable year-over-year improvement was seen in the segment’s fee-earning assets under management: a quarterly increase of $657.2 million from Q1, and $2.4 billion year-over-year, to $23.5 billion as of June 30. Also up were net fee-related earnings from operations, which totaled $32.9 million in Q2, up from $30.5 million for Q1 and $22.8 million in the second quarter of ’08.

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