Blackstone opportunistic real estate funds fall 3.2% in Q3 as core-plus gains 1.6%

Blackstone's opportunistic real estate funds fell 3.2 percent in the third quarter while its core-plus real estate funds gained 1.6 percent, according to the firm's quarterly earnings results reported by IREI.

The markdowns were concentrated rather than broad, per the Financial Times account cited by IREI. The opportunistic decline reflected valuation cuts on certain European properties and U.S. multifamily assets amid higher interest rates and geopolitical uncertainty.

Real estate assets under management ended the quarter at about $309 billion, down from $314.2 billion three months earlier, per the firm's financial disclosures. The same disclosures show the real estate arm drew about $6.3 billion of capital inflows and recorded $7 billion of realizations during the quarter; treating those as the only flows, they net to a $0.7 billion outflow. Valuation marks and other movements account for the remaining roughly $4.5 billion decline.

Jon Gray, Blackstone's president, told CNBC on Oct. 22: "It was a challenging quarter with markets, energy prices up 30 percent, the 10-year Treasury up 80 basis points. But the key for us is we delivered for our clients across the board. Our flagship strategies beat comparable public market indices, and that's what we care most about."

AirTrunk, the Blackstone- and CPPIB-owned data center operator, deferred a $1.5 billion Singapore REIT IPO to next year, this publication reported on Oct. 13. The company had weighed lifting the offering's yield to 6 percent.