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Investment management company Blackstone this week reported that high returns in its real estate investments fueled record-setting fourth-quarter results.
“Blackstone reported the most remarkable results in our history on virtually every metric,” Stephen Schwarzman, co-founder and chief executive, said as the company released its earnings results this week.
Its $280 billion real estate business generated nearly half of its earnings last year, Blackstone officials said on the earnings call.
The areas of rental housing, logistics, and life science offices comprise more than 70% of its equity portfolio. Rents in these sectors are growing at two to three times the rate of inflation, Blackstone says. All three sectors have seen rapid growth during the pandemic.
E-commerce has driven a rush to logistics spaces and warehouses, and vacancies are becoming more difficult to find. Blackstone also continues to make an aggressive push into rentals. It has focused on acquisitions of multifamily real estate investment trusts, affordable housing, and rental buildings, The Real Deal reports. Recently, Blackstone reported it would acquire $1 billion worth of affordable single-family rentals, adding 4,000 homes to its portfolio over the next two years.
About 80 percent of the firm’s real estate portfolio is comprised of logistics and rental housing, which the company says it believes is more insulated from market and inflationary pressures with its shorter-term leases.
“Blackstone’s fourth-quarter results represented a remarkable finish to a record-breaking year,” Schwarzman said.
Blackstone nearly doubled its net income to $2.9 billion since the fourth quarter of 2020. Its real estate investment trust and its Core+ business accounted for the majority of those increases. Its real estate ventures appreciated by 12% and its Core+ segment by 7.2%, The Real Deal reports.