Tag Archives: blackstone

Blackstone Poised to Profit From '' Unprecedented ' Trade War-Driven Volatility with $26.5 Billion War Chest

New York Personal Equity Giant Sees a Better Risk-Return Profile for Real Estate Outside the United States

Blackstone Group President Steve Schwarzman, speaking as the personal equity giant revealed its profits for the second quarter, stated it prepares to “wait patiently” to capitalize on financial investment chances that develop from the effect of rising protectionism on international trade, with as much as $26.5 billion in uninvested capital allocated genuine estate.

Schwarzman explained President Donald Trump’s directed international trade war as a “complex and highly vibrant” circumstance “involving the majority of the major economies worldwide all at once, which is really unprecedented given that The second world war.”

Offered the volume and magnitude of the prospective impacts on major economies “it’s sensible to presume many of the existing concerns will get solved,” he stated.

Jonathan Gray, the New York-based firm’s previous realty investment leader who was called president and chief operating officer of Blackstone previously this year, echoed Schwarzman’s sentiments at Wednesday’s Delivering Alpha Conference in New York City, where he said: “The United States and China both acknowledge real risks to an intensified trade war. Our company believe there will be resolution in the long term.”

In Thursday’s second-quarter incomes call, Schwarzman stated: “In the on the other hand, with $88 billion of dry powder capital, we can wait patiently for any opportunities that might arise from volatility and move quickly to benefit from them.

“As one example, when real estate stocks traded sharper previously this year, due to the rates of interest issues in terms of rates of interest going up, it was little separated in between the highest and the lowest quality assets, those with their best development capacity, they all went down. Our focus on value led us to finish or dedicate to six public company going private transactions throughout three continents.”

The $88 billion figure referenced by Schwarzman associates with the total uninvested capital across Blackstone’s four organisation lines: private equity, real estate, credit and hedge funds services. The real estate section includes $26.5 billion of that overall, marking the second-largest pool of capital by organisation line.

In the experts’ question and answer duration, Gray said there is more appealing risk return profile genuine estate outside of the United States in markets like Spain, “because there’s still some tradition distress” and “interest rates are most likely to remain, I think, lower for longer there. Therefore, we’ve been leaning forward.”

In capital raising, Schwarzman confirmed Blackstone will start raising loan for its flagship property funds “in the next numerous months.”

Michael Chae, primary monetary officer at Blackstone, stated during the Q&A that the launch of the next BREP, or Blackstone Property Partners, worldwide fund would be initially, followed by BREP Europe quickly thereafter.

“We expect our fundraising super cycle to bring the firm’s overall AUM (properties under management) above the $500 billion milestone, most likely in the first half of next year,” Schwarzman stated in his opening remarks. “Our capability to continue raising large scale capital begins and ends with investment efficiency.”

Blackstone’s opportunistic real estate funds valued by about 3 percent in the quarter and 6 percent in the first half of the year. However, efficiency was watered down by a strengthening dollar, which reduced Q2 fund appreciation by around 1 to 2 portion points, inning accordance with Chae, due to “considerable relative European and global footprints.”

Considering that beginning, Blackstone’s opportunistic property funds have actually returned 16 percent a year, net of all fees, which corresponds to 900 basis points over the relevant indexes.

“This kind of distinguished performance positions us well in an environment where capital flows are significantly migrating to two opposite ends of a barbell,” Schwarzman described. “On one side of the index funds, we’ve mainly simply mirrored the indexes and usually charged only numerous basis points of costs. On the other side are the alternative supervisors, including Blackstone, the referral institution in our industry.

He included that “our funds have actually produced materially higher net returns for our LPs than market indices, and protected capital throughout market declines.”

Internationally, Blackstone disposed of $8 billion of property in the 2nd quarter, including the final sale of its stake in Hilton Hotels, which created 3.1 times investors’ capital and $14 billion in revenue.

In Europe, Blackstone sold numerous London workplace possessions in the quarter it had actually purchased between 2012 and 2015 for 2.1 times several of invested capital. An additional $4 billion of disposals are under agreement, including a variety of offices and other property possessions in the United States, Europe and Australia.

Independently, Blackstone likewise almost doubled the properties under management of its core+ business line to $31.6 billion.

Blackstone Rolls Up AmericasMart in Atlanta to Expand in Display Room Mart Sector

Private Equity Giant, Which Acquired International Market Centers In 2015, is Purchasing Among its Main Mart Competitors

Blackstone-owned International Market Centers (IMC) will obtain its biggest rival in a move that will move ownership of more than 7 million square feet of showroom mart area from a company started by the late John Portman.

Las Vegas-based IMC, which Blackstone obtained in 2017, stated Tuesday it has actually accepted integrate with Atlanta’s AmericasMart, the home of the largest-single collection of house decoration, gift, rug and apparel product. The massive AmericasMart complex consists of 7.1 million square feet of showcase space in several buildings that cover a 14-block area in the heart of downtown Atlanta.

Regards to the deal were not revealed. Combined with IMC’s 12.2 million square feet of exhibit space in Las Vegas and High Point, N.C., International Market Centers will own and run almost 20 million square feet of the specialized showroom area that hosts markets and exhibits where merchants consult with producers and suppliers to select products to offer in their stores and online.

John Portman, the famous designer and developer who developed AmericasMart and numerous other landmark developments such as Peachtree Center in downtown Atlanta, passed away Dec. 29, 2017, at 93. Portman’s development of the Merchandise Mart, which opened in 1961, marked his first project in downtown Atlanta and forever changed the city’s core.

As the very first merchandise reveals gained traction, Portman understood he had developed a problem. Downtown Atlanta did not use sufficient hotel rooms to accommodate all the merchandisers and buying agents coming to town for the enormous sales marts.

“That’s what got me into the hotel service; we had no location to put them,” Portman informed this press reporter in an interview in April 2000. “The Regency [hotel] was a direct outgrowth of [the Merchandise Mart,” Portman said. “I was determined to develop as numerous hotels around the Market Center as it grew as I could.”

Ultimately he established the Westin Peachtree Plaza and Atlanta Marriott Marquis.

One of Portman’s boys, Jeffrey L. Portman, began working the docks at the Atlanta Product Mart when he was 8 years old. Today, Jeff Portman is president and COO of AmericasMart. He said the sale to IMC will reinforce both parties.

“AmericasMart has actually long functioned as a crossroads of commerce,” Portman said. “The signing up with of the exceptionally effective talents and resources present in both organizations will sustain and advance that function for the ultimate advantage of the customers we collectively serve.”

When the transaction closes, which is anticipated in July, Portman will serve as an advisor to IMC’s board of directors. Robert Maricich, the current CEO of IMC, will continue as president of the combined entity.

Prior to the purchase arrangement, IMC and AmericasMart had actually been fierce competitors in the mart service that hosts markets and exhibitions where merchants come to select products to offer in their stores and online. AmericasMart alone hosts 17 yearly markets and shows, consisting of the Atlanta International Present & & Home Furnishings Market and the Atlanta International Area Rug Market. Each year, more than 4,500 exhibitors and almost 200,000 attendees ply their sell the downtown Atlanta complex.

Blackstone Real Estate Partners and Blackstone Tactical Opportunities (Blackstone: NYSE: BX), in a collaboration with Fireside Investments, acquired IMC in 2017. The acquisition of AmericasMart shows the personal equity company’s continued confidence in Atlanta’s commercial property market, the company stated.

“Having grown up in Atlanta, I am well aware of the tremendous contributions the Portman household has made to the city and in developing AmericasMart into the leader it is today,” stated Tyler Henritze, head of U.S. Real Estate Acquisitions at Blackstone, in a declaration revealing the acquisition.

Henritze said Blackstone, which has actually invested $5 billion in other Atlanta realty residential or commercial properties given that 2012, will develop on Portman’s tradition “to even more purchase and enhance AmericasMart.”

Blackstone To Acquire Gramercy Residential Or Commercial Property Trust for $7.6 Billion

Gramercy Property Trust’s Logistics Center at DFW International Airport

Continuing to see logistics as among the greatest sectors of business property, an affiliate of Blackstone Group agreed to get Gramercy Residential or commercial property Trust today for $7.6 billion. The affiliate, Blackstone Realty Partners VIII, will acquire all impressive common shares of Gramercy for $27.50 per share in cash.

Since year-end 2017, Gramercy owned a portfolio of commercial, office and specialized retail homes totaling more than 82 million rentable square feet. The majority of that area, almost 76 million square feet, is commercial. Just recently prior to the handle Blackstone was revealed, Gramercy changed its Global Market Classification Requirement, a standardized classification system used to arrange company entities by sector and industry groups, from diversified to industrial.

The deal has actually been unanimously approved by Gramercy’s board of trustees and represents a premium of 23 percent over the 30-day volume-weighted average share price ending Might 4 and a premium of 15 percent over the closing stock price on Might 4.

“Our company believe this [deal] validates the quality of the portfolio and platform that we have built,” stated Gordon DuGan, Gramercy president.

For Blackstone, the offer is representative of its mode of operating: when it trusts the development chances for a particular sector, it purchases in a big method. International logistics is one of the sectors Blackstone was talking up in its very first quarter earnings teleconference where the push into online shopping is leading to much faster development.

This past March, the exact same Blackstone entity accepted acquire 41 storage facilities and 2 development from FRP Holdings for $360 million.

Conclusion of the Gramercy transaction is slated to take place in the 2nd half of 2018, upon the fulfillment of popular closing conditions. Morgan Stanley & & Co. is serving as unique monetary consultant to Gramercy. Eastdil Guaranteed is functioning as property expert to Gramercy. Wachtell, Lipton, Rosen & & Katz is acting as Gramercy’s legal consultant.

Citigroup Global Markets Inc. and Bank of America Merrill Lynch are serving as Blackstone’s financial consultants in connection with the transaction. Simpson Thacher & & Bartlett LLP is acting as legal consultant to Blackstone.

Blackstone Signs Up With Hunt for Vancouver Industrial Area

World’s Largest Realty Private Equity Firm Seeking To “Be Innovative” due to Competitors, Eyeing Land Leases, Sale-Leasebacks

The world’s biggest realty private equity firm with U.S.$ 120 billion under assets is eyeing the Vancouver commercial market for expansion, however the problem for New York City-based Blackstone Property Partners is so is everyone else.

At the Vancouver Property Online Forum, Charlie Deeks, the vice president of financial investments for Blackstone’s Canadian investment car, told the audience the company wants to expand even more in British Columbia’s largest city and is thinking about more long-lasting land leases as a method to break the marketplace.

Through affiliate BPP Pristine Holdings ULC, Blackstone paid $8.10 a system for Pure Industrial Property Trust (PIRET) in a deal worth $3.8 billion. The January deal, expected to close in the 2nd quarter, includes a Vancouver portfolio of about 12 properties with three million square feet.

” We wish to grow,” stated Deeks. “Part of our global method and Blackstone’s plan is to actually increase in this market. How do we do that? It’s been really challenging. We have actually done some of it with some sale-leasebacks. We are not scared of land leases. We have an excellent partner with the Port of Vancouver.”

Last July, PIRET completed a new advancement with IKEA, a < a href=" http://product.costar.com/home/news/156138?keywords=ikea&market=336" target=” _ blank “> seven-year lease to inhabit One Hundred Percent of the trust’s 330,540-square-foot center in Richmond.

” We need to be innovative to grow. We do not love where cap rates are, but where we see rents going, it is allowing us to pay the freight,” said Deeks, who said on the land lease side the majority of the terms are for 40 to 50 years with a possibility of renewal.

Beth Berry, vice president of commercial development for Beedie Development, the biggest industrial property manager in Vancouver, stated it’s ending up being challenging to “find the next chance” in the city, which Cushman & & Wakefield stated had a 2.2 percent job rate at the end of the fourth quarter of 2017.

The session to hear a few of the leaders in the Vancouver industrial sector was packed, a testament to the strength of the regional market.

” There is an industrial session where the space is full. Individuals are standing at the back. I don’t believe I have actually ever seen that in four or five years,” joked Chris Holtved, senior portfolio manager of property at Health care of Ontario Pension, who added he’s not sure demand is any different in Vancouver than other market in regards to demand for industrial driven by e-commerce.

However Holtved stated while the supply side is more constrained in Vancouver – and has actually increased prices – he noted an infill Manhattan task traded for US$ 600 per square foot. “You think it cannot get more pricey? It can,” he said.

One modification in the industrial landscape is need for strata. “Everybody wishes to own a piece of the rock,” stated Bill Randall, senior vice president of commercial for Cushman & & Wakefield and the mediator for the panel.

Brent Sawchyn, a principal at PC Urban Properties Corp., said among his company’s commercial tasks in southwest Vancouver offered out within fourth months of building and construction with a typical price of $315-$ 325 per square foot. In about 12-14 months, those systems are selling for $450 to $475 per square foot.

Beedie Advancement’s Berry stated it used to take 12 months before a brand-new commercial structure was totally absorbed. “We are now getting multiple deals and bully offers,” she stated. “We’ve never ever seen anything like it.”

One solution to tenant might be “vertical” industrial, however the consensus of the panel was Vancouver costs are not there yet.

” I think what you are seeing on the user side, they are finding out ways to get more from less commercial area much like on the workplace side,” stated Holtved, adding he recently saw commercial area without any aisles. “If you are going to see [vertical industrial] anywhere, it will be here [in Canada] in Vancouver initially probably.”

Garry Marr, Toronto Market Press Reporter CoStar Group.

Blackstone Purchasing Another Logistics Portfolio, This Time from FL-Based FRP Holdings

FL-Based Land, Mining and Advancement Business Capitalizes on Tax Benefits on $359 Million Sale

The 200,000-square-foot building at 7021 Dorsey Road in Hanover, MD’s Hillside Organisation Park is one of the biggest structures in the FRP Holdings portfolio.

FRP Holdings, Inc. (Nasdaq: FRPH) has actually accepted sell 41 warehouses and 2 advancement lots located primarily in the Baltimore, Philadelphia and Washington, D.C. markets to an affiliate of Blackstone Realty Partners VIII, LP for $358.9 million.

The sale of mainly smaller sized storage facility buildings averaging less than 100,000 square feet is anticipated to close in the second or third quarter of this year. The portfolio amounts to almost 4 million square feet, according to CoStar information and info in FRP’s regulatory filings.

Most of the structures are located in the Baltimore metro, with smaller sized clusters of homes in the Manassas/I -66 commercial submarket of D.C. and the Delaware submarket of Philadelphia. One of the biggest homes remains in the Norfolk Industrial Park in Hampton Roads, VA, at 188,000 square feet.

Blackstone entities have bought infill U.S. and Canadian industrial portfolios at a stable clip because returning to the logistics market in late 2016. Investors have actually sought to capitalize on the growing demand for e-commerce distribution centers, particularly metropolitan and rural properties near population centers where carriers can Amazon and other e-commerce business can fulfill same-day or next-day delivery to online buyers.

Jacksonville, FL-based FRP Holdings was formed in 1986 through the spin-off of the real-estate and transport organisations of Florida Rock Industries, Inc., now a completely owned subsidiary of Vulcan Materials. The business has company sectors in industrialized structures, mining royalty lands and other development lands.

FRP said in a release it would redeploy proceeds from the sale into other organisation segments, including mining and land advancement.

“The reduction in business income tax rates in a low cap rate environment created too good an opportunity to give up,” stated John D. Baker II, executive chairman and CEO.

Eastdil Safe, LLC is functioning as FRP’s unique broker in the deal. Houlihan Lokey Capital, Inc. functioned as monetary advisor and Nelson Mullins Riley & & Scarborough LLP serves as legal counsel to FRP. Simpson Thacher & & Bartlett LLP acts as counsel to Blackstone on the transaction.

Blackstone REIT Expands '' Last-Mile ' Warehouse Holdings with $1.8 Billion Portfolio Purchase

22 Million-SF Canyon Industrial Portfolio Consists Of Amazon, DHL, FedEx and Coca-Cola Amongst 377 Tenants

Blackstone Realty Earnings Trust, Inc. (BREIT) revealed it has successfully closed on a $1.8 million transaction to obtain a 22 million-square-foot portfolio consisting of 146 infill storage facility and circulation properties throughout the country.

Referred to as the Canyon Industrial Portfolio, the properties were offered by a set of funds sponsored by Boston-based Cabot Properties: Cabot Industrial Worth Fund IV, L.P. and Cabot Industrial Worth Fund IV Manager, LP. Blackstone had previously put the portfolio under contract in late December.

The gotten properties includes 146 “last-mile” structures, with the biggest concentration in Chicago at 4 million square feet accounting for 18% of the portfolio’s aggregate base rent; followed by Dallas (3.22 million SF, 12%), Baltimore and Washington D.C. (1.86 million SF, 12%), Los Angeles and Inland Empire, CA (1.12 million SF, 7%), South-Central Florida (1.12 million SF, 7%) and Denver (1.07 million SF, 6%).

The portfolio’s 377 occupants consist of Amazon, Federal Express, DHL, Coca-Cola, Fiat Chrysler and the U.S. federal government, according to a securities filing.

BREIT noted that the industrial job rates throughout the portfolio’s markets has actually continued to decline over the previous seven years and is presently just 4.6%, while rents have actually increased 5.7% year-over-year.

“The ongoing market lease development in the portfolio’s markets resulted in leas on brand-new leases surpassing leas on expiring leases by 9% in the portfolio during the third quarter of 2017,” Blackstone stated, adding that the portfolio has some leasing upside as it’s presently 90% inhabited.

“BREIT’s portfolio, with its emphasis on steady, income-producing warehouse and apartment or condo assets, is well placed to take advantage of continued tailwinds in these sectors,” stated A.J. Agarwal, Blackstone REIT president and head of U.S. core-plus real estate for the private-equity giant.

The Blackstone-sponsored non-traded REIT buys supported U.S. industrial realty homes, including multifamily, industrial, retail and hotel possessions.

BREIT’s portfolio now amounts to $7 billion over 272 properties, consisting of 33 million square feet of commercial area and 17,200 multifamily houses, with some select-service hotels and grocery-anchored shopping centers.

Blackstone has re-entered the U.S. commercial market in a huge way considering that last year, when it acquired a 38-property portfolio totaling 4.4 million square feet in Southern California from Principle Realty Investors for about $500 million.

In January, the private-equity business consented to buy Canada-based Pure Industrial Real Estate Trust, which owns and operates industrial residential or commercial properties throughout The United States and Canada, in an all-cash offer valued at about $2 billion.

Blackstone Names Property Chief Jon Gray to Prosper Tony James as President

Gray Deputies Kathleen McCarthy, Kenneth Caplan to Co-Lead Global Real Estate System

From left, Blackstone senior executives Jonathan Gray, Kathleen McCarthy and Kenneth Caplan.

Credit: Blackstone

Blackstone Group LP (NYSE: BX) today revealed that Jonathan Gray, who built the private-equity firm’s property business into the world’s biggest real estate investor, will prosper Tony James as president and chief operating officer. Two of Gray’s top deputies, Kathleen McCarthy and Kenneth Caplan, will co-head the huge global real estate group Gray has actually led since 2005.

Although James will be turning over daily management of the company to the 48-year-old Gray, he will continue in a full-time function at the company and assume the title of executive vice chairman. Gray and James will both report to Blackstone co-founder, Chairman and CEO Stephen A. Schwarzman.

Caplan and McCarthy have comprehensive experience with every aspect of the real estate business and have assisted supervise its major functions. Caplan now works as a senior managing director and international primary financial investment officer of the property group and has invested almost all his whole career at the firm. He has been involved in over $100 billion of realty acquisitions globally because joining Blackstone in 1997 and invested several years in the business’s London office, working as head of real estate in Europe.

McCarthy also presently works as a senior handling director in addition to international COO of Blackstone Realty. She is accountable for the real estate business’s daily operations with a specific focus on financiers, capital raising, service development and new financial investment items. She signed up with Blackstone in 2010 after a years in real estate financial investments and mergers and acquisitions.

In a statement, Gray said he has “tremendous confidence” in the ability of McCarthy and Caplan to continue the realty group’s strong track record.

“They are outstanding financiers and operators with impressive judgment, efficient in driving the group to brand-new heights,” added Gray, who signed up with Blackstone straight out of college in 1992 and will remain chairman of Blackstone’s real estate investment committee.

Gray began in the private equity and mergers and acquisitions locations of the company prior to signing up with the real estate group at its inception. Because 2005, he has actually helped develop the world’s largest realty organisation with more than $115 billion of investor capital. He sits on Blackstone’s board of directors and management committee, playing an important function in management, strategy and decision-making.

“I’ve discovered over the last 26 years that Jon Gray has excellent judgment, huge energy and distinct personal charisma, which has actually enabled him to gather enormous respect within the worldwide monetary neighborhood,” Schwarzman said.

Schwarzman added that the consultation of Gray as president and COO “lays the structure for the next generation of senior management and positions the company well for future leadership.”

James signed up with Blackstone in 2002 as vice chairman and COO and assumed the title of president in 2006 when co-founder Peter G. Peterson retired. In his new role, James will continue to rest on the company’s financial investment committees, aid develop brand-new companies, act as a company representative and manage tactical external relationships. He will also continue to sit on the firm’s management committee and board directors.

“Tony James has actually had a bigger effect on Blackstone than anyone in the company’s history,” Schwarzman said.

Blackstone Rocking CMBS Market with Set of Huge Funding Deals

Single Borrower Securitization Driving Activity; Giant PE Company Accounts for More Than One-Third of Those Deals

The Pinnacle I in Burbank, CA, will help secure a new CMBS offering backing an ew Blackstone acquisition.
The Pinnacle I in Burbank, CA, will help protect a brand-new CMBS offering backing an ew Blackstone acquisition. September capped off another active month for commercial home mortgage

securitizations with single debtor offers driving development. Year-to-date CMBS issuance now stands 40% higher compared to this time last year. The majority of that activity is the outcome of single-borrower deals, which are up 117%, while avenue CMBS loaning is up simply 10%, inning accordance with Morgan Stanley Research study. Predicted annualized issuance must now quickly surpass in 2015’s deal circulation.

Driving that single-borrower surge are deals tied to one firm: Blackstone Group (NYSE: BX ). CoStar news counts 54 single-borrower CMBS deals this year amounting to $32.8 billion, including 7 multifamily deals from Freddie Mac. Of those 54, Blackstone affiliates are the borrowers in 13 of the cases totaling $10.6 billion in deal issuance.

That represents a large increase for the private equity giant, which last year was associated with simply three CMBS offers totaling $3.24 billion.

And the New York-based PE fund has two more CMBS handle the works financing its 2 newest purchases.

Deutsche Bank and UBS Securities are preparing an offering protected by home loans on Blackstone purchase of six Class A workplace residential or commercial properties in Burbank, CA. For the 2nd funding, Citigroup is leading an offering secured by Blackstone’s current purchase of the International Market Centers in North Carolina and Nevada.

” Huge offers always go the CMBS market,” stated Richard Hill, executive director of Morgan Stanley Research study. “That’s because life insurance coverage companies normally don’t prefer to partner together, and their bite-size is typically limited to around $300 million to $400 million. Anything larger than this generally discovers its method to CMBS.”

CMBS borrowing also features relatively low interest rates and provides financiers access to higher quality assets and increased transparency, other experts said.

Momentum in single-borrower deals is anticipated to drive issuance of business mortgage-backed securities in the 4th quarter too, inning accordance with Morningstar Credit Rankings, with the majority of those deals backed by workplace properties or hotels.

In spite of the extensive expectation that interest rates will increase, strong financier need for office buildings in significant markets is keeping capitalization rates low as the market gets in the fourth quarter.

As interest rates increase, the pattern of lower workplace cap rates is expected to reverse, but that won’t take place until next year, according to Morningstar. Office building investors have gained from a combination of limited building and construction, lower cap rates and increased net operating earnings to own evaluations sharply higher because 2010, inning accordance with Morningstar.Blackstone Buys Burbank Workplace Properties In the very first of the 2 brand-new CMBS securitizations involving Blackstone, affiliates of the company are purchasing control of a Burbank Media District office portfolio. The offer includes control of 3800 W. Alameda Ave. and 3821 W. Riverside Dr. purchased for$ 172.5 million from affiliates of Worthe Property Group. Worthe has actually kept an ownership stake in the properties and will continue to manage them for Blackstone. The offer likewise included Hudson Pacific Residence ‘( NYSE: HPP) 65% ownership in the Peak I at 3400 W. Olive Ave. and II at 3300 W. Olive. Blackstone agreed to pay$ 350 million, consisting of the assumption of$ 216 million of project-level funding. That part of the deal is expected to close by Nov. 1, 2017. Reports also suggest the sale consisted of 2900 and 3500 W. Alameda Ave. Blackstone’s purchase of the six workplace homes, with a

combined total of 3.3 million square feet, values the portfolio at a reported$

1.7 billion.Blackstone Completes Acquisition of International Market Centers Late last month Blackstone funds likewise completed the formerly reported acquisition of

International Market Centers Inc. from Bain Capital Private Equity and funds
managed by Oaktree Capital Management. Fireside Investments likewise partnered with Blackstone on the acquisition. Home loans financing that estimated $1.5 billion purchase will comprise the other CMBS securitization for Blackstone expected throughout the fourth quarter. IMC is the world’s largest owner and operator of showroom space for the furnishings, house decor and gift markets, with 12.2 million square feet of exhibit area in Peak, N.C. and Las Vegas

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Blackstone and Starwood Merging Rental House Portfolios to Produce $11 Billion Company

Combined Portfolios Will Consist of 82,000 Single Household Rental Homes, the Largest in the USA

The Blackstone Group’s(NYSE: BX)Invite Houses(NYSE: INVH)and Starwood Waypoint Homes(NYSE: SFR), two of the nation’s largest rental-home owners, are integrating in a 100% stock-for-stock merger that would produce one of the largest owners of rental houses in the U.S. with approximately 82,000 single-family rental homes.

The combined business will operate under the Invite Homes banner and continue trading on the New York Stock Exchange under the ticker symbol for Invite Homes (NYSE: INVH).

Under the terms of the agreement, each Starwood Waypoint Residences share will be transformed into 1.614 Invitation Homes shares, with Invitation Homes stockholders will own around 59% of the combined business’s stock.

Based upon the closing prices of Starwood Waypoint Homes common shares and Invite Homes typical stock on Aug. 9, 2017, the equity market capitalization of the combined business would be approximately $11 billion and the total business value (consisting of debt) would be roughly $20 billion.

Invite Houses stock was up 80 cents on the news today (3.81%) to about $21.80/ share. Starwood’s stock leapt much more: $2.90/ share (9.22%) to $34.35/ share.

This tactical deal combines two business with highly complementary abilities, including Invite Houses’ industry-leading approach to customer service and asset-management competence, and Starwood Waypoint Homes’ industry-leading technology. In addition, the current Starwood Waypoint Houses CEO Fred Tuomi, who will end up being CEO of the combined business, has experience effectively incorporating mergers of large-scale, single-family rental business. In general, the 2 business have actually invested nearly $2 billion, an average of approximately $22,000 per house, in restorations and upkeep, improving resident experience and driving financial growth and task production in local communities.

The combined business would own and manage a portfolio of approximately 82,000 single-family homes.

The two companies have really similar portfolios of homes focused on overlapping, high-growth markets – with nearly similar average monthly leas and almost 70% of combined business earnings originating from the Western United States and Florida.

The combined portfolio would likewise have approximately 4,800 houses per market, enabling it to leverage economies of scale and enhance operating performance.

The combined company experienced pro forma same-store net operating income (NOI) growth of 7.0% in 2Q 2017 with over 95% occupancy.

The companies’ combined portfolios still represent less than 0.1% of the more than 90 million single-family homes in the United States, and simply 0.5% of the almost 16 million single-family houses for rent in the U.S.

Upon conclusion of the deal, Fred Tuomi, CEO of Starwood Waypoint Houses, will end up being CEO of Invitation Houses; Ernie Freedman, CFO of Invitation Residences, will remain CFO; Charles Young, COO of Starwood Waypoint Residences, will end up being COO; and Dallas Tanner, CIO of Invite Houses, will stay CIO. The combined business will be locateded in Dallas, Texas, and will preserve a presence in Scottsdale, Arizona.

The combined company is expected to produce projected yearly run-rate cost synergies of $45 million to $50 million. The combined company is likewise anticipated to benefit from a flexible balance sheet with lower long-term cost of capital and a continued course towards deleveraging.

The deal has been all authorized by the boards of both Starwood Waypoint Residences and Invitation Houses. Blackstone, the bulk investor of Invite Homes, has likewise granted the contract. The deal is expected to close by year-end, subject to approval by Starwood Waypoint Residences stockholders and other traditional closing conditions.

Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are serving as monetary consultants and Simpson Thacher & & Bartlett LLP is functioning as legal advisor to Invite Residences. Morgan Stanley & & Co. LLC and Evercore are serving as financial consultants and Sidley Austin LLP is serving as legal advisor to Starwood Waypoint Houses.

Blackstone To Spin-Off La Quinta’s Hotels into a New REIT

La Quinta Holdings Inc.(NYSE: LQ) has officially submitted with the United States Securities and Exchange Commission to proceed with its previously revealed plans to separate its real estate company into a brand-new REIT to be named CorePoint Lodging Inc. The relocation will create two unique, publicly traded business.

Irving, TX-based La Quinta is a leading owner, operator and franchisor of select?service hotels mostly serving the upper?midscale and midscale sectors. The company’s owned and franchised portfolio consists of more than 885 hotels representing about 87,500 spaces in 48 states in the United States, and in Canada, Mexico, Honduras and Colombia. Affiliates of private equity giant Blackstone Group LP own roughly 27% of La Quinta’s public stock.

Following the spin deal, CorePoint Accommodations anticipates to be the only publicly-traded U.S. lodging REIT strategically concentrated on serving the midscale and upper-midscale select-service segments.

CorePoint’s portfolio will include 316 hotels, excluding three hotels held for sale, with 40,500 rooms with 32% of them in the Leading 25 markets as defined by Smith Travel Research study (STR).

As a stand-alone public company, CorePoint’s overall adjusted EBITDA for the complete year 2017 is estimated to be in between $200 million and $215 million.

Post-spin La Quinta and CorePoint Lodging each anticipate to complete several funding transactions including the refinancing of considerably all of La Quinta’s existing financial obligation.

As a stand-alone company, La Quinta expects to take advantage of a pipeline of interest from designers in expanding the brand into the more than 30% of U.S. markets where the brand is not yet represented.

La Quinta’s total adjusted EBITDA for full year 2017 is approximated to be between $110 million and $115 million, consisting of fee earnings under continuous franchise and management agreements with CorePoint.

J.P. Morgan is acting as monetary consultant to La Quinta Holdings Inc. Simpson Thacher & & Bartlett LLP is acting as legal consultant.