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Blackstone Prepares A Record $50 Billion To Snap Up Real Estate During The Coming Crash

The US housing market appears to be on the decline and ready to crash, as few Americans can afford the homes at sky-high prices with soaring interest rates. Blackstone, ready to pounce on crashing prices for distressed properties, is close to finalizing a $30 billion fundraiser to bring its war chest total up to $50 billion that would set a record as the biggest vehicle of its kind. Some of the funds are committed to purchasing real estate in Asia and Europe. According to the WSJ, Blackstone will focus on four key areas: warehouses used for e-commerce; life-sciences office buildings; rental housing; and hospitality tied to travel and leisure. Blackstone is the largest US residential landlord.

The past two months have seen a barrage of negative news coverage focusing on the US housing market…

… which is predictable: after all, with mortgage rates soaring at the fastest pace on record to decade highs, and sending US housing affordability to the lowest in history…

… only a handful of the “1%” can afford the American Dream.

Alas, it also means that just like in 2007, a housing crash is now just a matter of time.

That much is known. What is also know, is that once housing craters, the largest US residential and commercial landlord – private equity giant Blackstone – is about to get even bigger. That’s when it will deploy some (or all) of the record $50 billion in dry powder it has raised to prepare for just the coming housing crash.

According to the WSJ, Blackstone is the final stages of raising a new real-estate fund that would set a record as the biggest vehicle of its kind, defying market volatility and a crowded landscape for fundraising.

The private-equity giant said in a regulatory filing Wednesday it has closed on commitments totaling $24.1 billion for Blackstone Real Estate Partners X, the latest iteration of its main real-estate fund.

According to the WSJ, Blackstone is committing about $300 million of its own capital and has allocated an additional $5.9 billion to investors, which will bring the fund to $30.3 billion when it is finalized. The firm raised the fund, expected to be the largest traditional private-equity vehicle in history, in just three month. It was also Blackstone that set the prior record, with the $26 billion buyout fund it raised in 2019. The new real-estate fund will be 50% larger than its predecessor, a $20.5 billion pool raised in 2019.

Together with funds dedicated to real estate in Asia and Europe, Blackstone will have a war chest of more than $50 billion to do so-called opportunistic investments, which tend to be higher-risk deals with the potential for higher returns.

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