Blackstone Doubles Down, Snaps Up $2B in Commercial Real‑Estate Loans: Report

Blackstone (BX) is reportedly acquiring an additional $2 billion worth of commercial real estate loans, building on its existing portfolio in the sector.

According to a report by The Wall Street Journal, the loans are performing and backed by apartment buildings and neighborhood retail. However, Blackstone is purchasing the loans at a roughly 7% discount of their face value from Richmond, Virginia-based Atlantic Union Bankshares, because the loans were made before interest rates increased and have since lost value.

According to the report, Atlantic Union is selling its portfolio to Blackstone following its merger with Sandy Spring Bank, a regional lender based in Maryland, in April. The portfolio primarily consists of loans that Sandy Spring had issued.

As part of the deal, Atlantic Union reportedly “marked-to-market” Sandy’s commercial property portfolio, meaning it changed the value of those loans on its balance sheet to reflect the current market.

Over the past two years, Blackstone has scooped up $20 billion worth of discounted commercial property loans from small, regional, and foreign banks, amid industry-wide efforts to reduce their exposure to the sector.

The property sector is witnessing a slump, hurt by elevated interest rates that have crimped home buying demand. The office sector is also experiencing a downturn, as many employees are now working from home following the pandemic.

Retail sentiment on Stocktwits was in the ‘neutral’ (51/100) territory, while retail chatter was ‘high.’

Blackstone stock has fallen 14.4% this year. (YTD)

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