When Blackstone buys a building – say, an office block in London – employees are dispatched to “walk the asset”, considering its size and location, ceiling height, ventilation, natural light, transport links, the number of lunch spots nearby, how many students, creatives and computer programmers are moving to the area and what other businesses are located there. In that room, you’d probably be more informed about what was happening in the world of real estate than in any other room on the planet.” “You could be talking about shopping centres in Shanghai one minute, offices in Seattle the next minute. (This event used to be held at the Waldorf Astoria hotel in Manhattan, which Blackstone used to own.) “It was like drinking from a firehose in the world of real estate,” a former Blackstone executive told me of one meeting at the Waldorf. In the years before the pandemic, the company presented its “conviction themes” – the areas where it plans to invest – to its largest shareholders at an annual investor meeting. Although Blackstone insists that its top priority is providing a good service, the finance industry’s expectation of increasing returns can seem at odds with the interests of tenants. Unlike warehouses or office blocks, the principal revenue source in rental homes are the people who live in them. In recent years, it has become known for creating a profitable asset class from residential properties – in other words, buying up homes. But it is Blackstone’s interest in another type of real estate that has attracted the most scrutiny. Now, it seems to prefer life-science laboratories and warehouses rented out to last-mile delivery firms. In the 2000s, Blackstone’s real estate division was known for buying up office spaces and hotels. “For Blackstone, real estate is the goose that lays the golden egg,” Brett Christophers, a professor of geography and author of a forthcoming book about the asset management industry, told me. Its $320bn real estate portfolio is more than six times larger than that of BlackRock. Fink’s company dwarfs Blackstone, but when it comes to property, Blackstone is the giant. Fink and Schwarzman now work on opposite sides of Park Avenue.
In 1994, BlackRock became an independent firm and Blackstone sold its shares in the company. It is not to be confused with BlackRock, an asset management firm founded by Larry Fink, who worked for Blackstone in the 1980s and set up its bond-investment business. Some investments can return to this table three or four times for approval before they’re ultimately killed.īlackstone is an asset manager, a type of private financial firm that invests the wealth of pension funds and insurance companies. The Monday meeting resembles an intense seminar whose participants zero in on the weaknesses in proposals that pass before them. Last year, the company invested $270bn, bringing the total value of the assets it manages to $881bn, slightly more than the gross domestic product of Switzerland, and more than twice that of Denmark. It’s here that Blackstone’s investment decisions are made. Every Monday, the firm’s founder Steve Schwarzman and chief operating officer Jon Gray gather with senior partners around a large conference table on the 31st floor to discuss investment memos sent the previous week by teams in the company’s 26 offices in the US, Europe and Asia. The New York headquarters of Blackstone are located in a skyscraper on Park Avenue. If you wear Spanx, have ever matched with someone on Bumble, stayed in a Hilton hotel or a CentreParcs resort, visited Legoland, Madame Tussauds, the London Dungeon or an elderly relative at a Southern Cross care home, you have encountered a company that forms, or has recently formed, part of the Blackstone empire. Blackstone doesn’t just own real estate, it owns everything – or that’s how it can feel when you start to examine its bewildering array of assets. Over the past two decades, it has quietly taken control of apartment blocks, care homes, student housing, railway arches, film studios, offices, hotels, logistics warehouses and datacentres. B lackstone is the largest commercial landlord in history.
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