Blackstone lines up billions for CRE lending
Mike Nash, chief investment officer of the Blackstone Group (BX) real estate debt business, said he is ready to tap billions of dollars in reserves to fund upcoming maturities in commercial real estate. While the commercial mortgage-backed securities market has rebooted faster than the residential side, new issuance remains a fraction of the pre-crisis levels. With $2.5 trillion of CRE debt set to mature over the next seven years, property owners are holding substantial liquidity needs. According to the Mortgage Bankers Association, the amount of this debt outstanding declined only 2.7%, or by $67 billion in the entire fourth quarter. Nash said exacerbating the problem are the waves real estate lenders exiting the market. "With $2 billion invested and several billion more available to invest, Blackstone is uniquely positioned to meet this demand for debt capital," Nash said. A recent report from Standard & Poor's showed that larger CMBS deals were finally making their way back after a 15-month period of smaller transactions. However, delinquencies on legacy CMBS continue to break records, according to Fitch Ratings. The other credit rating agency Moody's Investors Service anticipates CMBS issuance will grow to $37 billion in 2011, a fraction of the $230 billion issued four years ago. However, Blackstone closed its most recent debt strategies fund on Feb. 1, bringing total commitments to $3.5 billion, the company said Monday. "Our real estate debt business, BREDS, is focused on providing real estate owners much needed mezzanine debt capital and other structured debt solutions in order to assist these owners in the recapitalization of legacy assets or to facilitate new real estate investment," Nash said. Write to Jon Prior. Follow him on Twitter @JonAPrior.