Blackstone Planning New European Real Estate Fund, James Says

  • President says BREP Europe ``at some point'' will be in market
  • Firm recently completed record $15.8 billion global pool

Blackstone Group LP, after raising a record $15.8 billion for a global real estate fund, is planning to gather money for a new European property pool, said Tony James, president and chief operating officer of the world’s largest alternative-asset manager.

The New York-based firm gathered 6.6 billion euros ($7.5 billion) for its fourth European real estate fund last year, reopening the pool to investors after reaching its target because demand was so great. Blackstone has said it has invested about two-thirds of the fund, Blackstone Real Estate Partners Europe IV, with 2014 being the company’s busiest year ever for property deals in Europe.

“In real estate we’re coming to the end of a couple of funds that are chunky funds,” James said on a conference call with investors Thursday to discuss third-quarter results. “BREP Europe at some point will be in the market.”

The firm also is raising a new real estate mezzanine-debt fund, James said.

Jon Gray, Blackstone’s global head of real estate, said at a conference in San Francisco this month that the firm plans more investments in southern Europe, even as economic distress across the continent has bottomed. Blackstone’s real estate deals there include warehouses, office buildings, apartments, and commercial- and residential-property loans.

Blackstone in July agreed to buy Nordic real estate assets valued at about 22 billion kroner ($2.7 billion) in the region’s largest property transaction since 2008. The cash deal included residential and commercial real estate in Norway, Sweden, Finland, Latvia and Germany.

In so-called core-plus real estate, Blackstone has amassed about $8.5 billion in assets under management, James said Thursday. The firm made its first investment in that type of property -- high-quality buildings that require light renovation or leasing to boost returns -- in December 2013.

“Core-plus has huge potential and we’re just beginning on that,” James said.

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