Blackstone has decided to dissolve its Blackstone Real Estate Income Fund and related entities, which invest primarily CMBS, RMBS and mezzanine debt, although recently it has built up a strong cash position, according to a regulatory statement.
In the coming weeks, Blackstone expects to seek shareholder approval of the proposed dissolution. Blackstone "believes that an orderly wind down would provide shareholders with the best path to maximize portfolio recovery while also providing shareholders with liquidity," according to the regulatory statement.
At $550 million NAV, the fund represents a small portion of Blackstone's real estate assets under management.
CMBS, like many assets, swooned at the start of the pandemic. Recently, Blackstone reports, the funds' assets "have begun to see a recovery in pricing since the recent trough related to the outbreak of COVID-19."
Nonetheless, CMBS is showing signs of deep strain with $21 billion of these loans transferred to special servicing since mid-March, or more than double the value for all of last year, according to Fitch Ratings.
Transfers to special servicers were highest in April and then went down in May to levels less than those in March, Fitch said.
In June Trepp reported that the delinquency and special servicing rate for commercial mortgage-backed securities logged the largest increase since the metric was introduced in 2009.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
