Blackstone Shakes Up Portfolio: Sells $3.1B Industrial Real Estate and Eyes Las Vegas Exit

Blackstone, known for its recent restrictive clauses on owner withdrawals for several months in a row, has responded with a significant move by declaring the sale of $3.1 billion of its industrial real estate portfolio from its opportunistic funds, and was reported by Benzinga to be contemplating liquidating its Las Vegas holdings. A company spokesperson has since reached out indicating that this is not the case however.

Blackstone has sold 70 assets from its industrial portfolio to Prologis Inc., a deal comprising approximately 14 million square feet that is set to be finalized by the end of Q2, marking the most recent in a series of deals between the two entities in the past 11 years.

This deal reflects the ongoing strength of the industrial/warehouse sector in contrast to other commercial sectors in the current market. The national average lease rate for industrial space reached $7.18 per square foot in April— a 7% increase from the previous year. Consequently, it is estimated that industrial real estate worth $12.6 billion was sold in the first four months of 2023.

Rumors also suggest Blackstone is considering selling half of its $4.25 billion interest in the Bellagio Resort & Casino in Las Vegas, that it had originally acquired in 2019. The Bellagio— which is currently controlled by MGM Grand, is considered one of the more profitable businesses on the Las Vegas Strip. As such, Blackstone’s share would likely attract several buyers if it were to hit the market.

Over the last few years, Blackstone has consistently sold its casino assets, such as the sale of the Cosmopolitan hotel for $5.65 billion in 2021, and selling off 49.9% of its ownership of MGM Grand and Mandalay Bay in 2022.

Even though it’s one of the biggest landlords in the US, Blackstone appears to be navigating some uncertainty. It’s selling off certain assets, but the motivations are unclear. These properties could have simply reached the end of their investment cycles, or Blackstone might be pre-emptively liquidating high-value assets before a potential further increase in interest rates.

A prior version of this story suggested that the assets sold may have been from the Blackstone Real Estate Investment Trust, rather than Blackstone’s opportunistic funds, which was incorrect and for which a correction has been made. The company also identified that they are “big believers in Las Vegas,” and that the rumors are not true in relation to selling off its holdings in that locality.

Information for this briefing was found via Blackstone and the sources mentioned. The author has no securities or affiliations related to these organizations. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.


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