Home Finance Blackstone Expands Apartment Exposure with Seven Assets in Washington State

Blackstone Expands Apartment Exposure with Seven Assets in Washington State

Granite, Gary Merlino Construction Company, Seattle, Alaskan Way Project, Ethisphere Institute,

By Jon Peterson

New York City-based Blackstone Real Estate Partners has added to its apartment exposure in the state of Washington with the acquisition of seven assets. These properties were part of a 16-property portfolio that the real estate manager acquired for $750 million, according to sources familiar with the transaction.

Blackstone declined to comment when contacted for this story. Some of the Washington State assets are located within the Seattle metropolitan area. The other assets in the portfolio are spread out across the country in markets like Oregon, Southern California and North Carolina. Blackstone would not disclose any details on the assets or their addresses.

The seller of the assets was Bridge Investment Group Holdings. The manager also declined to comment when contacted for this story. The company is based in Salt Lake City and has a regional office in San Mateo, Calif. It worked on the sale of the portfolio with assistance from Key Bank. Blackstone represented itself in the deal.

The total number of units in the portfolio is over 5,000. At the time of the sale the overall occupancy in the portfolio was in the range of 93 percent to 95 percent.

Blackstone has acquired the portfolio for its latest opportunistic coming fund, as stated by sources familiar with the transaction. This would be the Blackstone Real Estate Partners VIII. This is a commingled fund where the manager had a final closing in October of 2015. The total equity raise for the commingled fund was $15.8 billion.

Due to the size of this commingled fund, Blackstone is typically looking at acquiring either very large single assets or large portfolios. These could be a mixture of the four main property types of office, industrial, retail and apartments or specialized property types like senior living assets.

Bridge Investment Partners had put together the apartment portfolio that it sold for its closed-end commingled fund, ROC Multi-family Office Fund 2. The real estate manager had decided to put the portfolio up for sale as the life term of the commingled fund was coming to an end.

The real estate manager had a final closing on the capital raise in October of 2013. It had raised a total of $595 million of equity, according to the company’s Web site. The capital sources that are in the commingled fund include high net-worth individuals and institutional investors based in the US, Europe, Australia and Asia. The commingled fund had an investment strategy of buying existing apartments that had a value-add component to them.