Michael Fassnacht’s Post

Huge news in our CRE space, specifically the multi-family sector…a BIG TIME doubling down BY Blackstone… Excerpts from this The Wall Street Journal —- ‘It reflects the firm’s bullishness on rental housing and its belief that commercial real estate overall is bottoming and the time is ripe to step up investments…. “We can see the pillars of a real-estate recovery coming into place,” Blackstone President Jonathan Gray said on an earnings call earlier this year. “We are, of course, not waiting for the all-clear sign and believe the best investments are made during times of uncertainty...” …The commercial real-estate market has been suffering its worst downturn since the 2008-09 financial crisis. Higher interest rates have hurt values of most property types… “If I’m a seller, I’m holding out hopes that the Fed does as it’s signaling,” said Jim Costello, chief economist of MSCI Real Assets. “If I’m a buyer, I will underwrite every worst case before I jump in.” “The public market has probably overshot,” Pawlowski said (John Pawlowski, an analyst at real estate analytics firm Green Street)… “It’s gotten too negative.” Blackstone considers multifamily, and rental housing in general, one of the best commercial property segments to invest in. —- I sure hope John Pawlowski is correct in his prognostication! There will always be opportunities for the vigilant…🇺🇸 🔮 NC-CCIM The CCIM Institute Charlotte Region Commercial Board of REALTORS® REALTORS® Commercial Alliance of Southeastern North Carolina (RCASENC) #commercialrealestate #multifamily #housing #interestrates Federal Reserve Board #endurancerealestate https://lnkd.in/ePz8gyAu

Blackstone's Multifamily Investment in AIR Communities: Seizing Opportunities 💼 Blackstone acquires upscale apartment owner AIR Communities (AIRC) for $10 billion, signaling a return to aggressive investments in real estate. Key Points: 🏢 Acquisition of AIR Communities includes 76 rental housing communities primarily in coastal markets. 💰 Blackstone plans to invest an additional $400 million to enhance the properties. 📈 Largest transaction in the multifamily market for Blackstone, showcasing bullishness on rental housing and commercial real estate. Investment Strategy: 🔍 Blackstone sees signs of real estate recovery and believes in seizing opportunities during uncertain times. 💡 Recent investments include acquiring a stake in a $17 billion loan portfolio and forming ventures in data centers and single-family rental homes. Transaction Details: 💲 Acquisition price of $39.12 per share, a 25% premium to AIR Communities' closing share price. 💼 Transaction valued at about $10 billion, including debt assumption, to be completed in the third quarter. Outlook: 🏘 Blackstone views multifamily and rental housing as promising segments despite challenges like new supply and higher interest rates. 📈 Markets in AIR Communities' portfolio show resilience compared to others, making it an attractive investment opportunity. Conclusion: 🔄 Blackstone's move reflects confidence in real estate markets and a strategic approach to capitalize on emerging opportunities in multifamily properties. https://lnkd.in/ge-Y3hax

Blackstone's deal to acquire AIR Communities is priced 25% above AIR's stock price at the time of the announcement. But the valuation is closer to what apartment properties are actually trading for on the private market -- suggesting Blackstone is betting that the public markets are inefficiently pricing multifamily REITs. Whether that is true or not, we'll see, but apartments just haven't been trading at the values implied by REIT prices. One of my favorite commentators, CRE Analyst, published a post yesterday estimating an implied cap rate of 4.85%. That is by no means bargain bin discount shopping, but it is market reality. It's within the range of property-level trades for similar product -- high-quality assets in mostly high-quality markets. This is a good reminder that CRE and multifamily pricing indices based on stock prices are often poor gauges for real-world valuations. Stock prices can fluctuate for reasons that have nothing to do with the value of the underlying real estate assets. MSCI had a great chart last year showing valuations based on a repeat sales methodology were substantially higher than one using REIT stock prices. The deal also comes as no big surprise, given that Blackstone's Jon Gray has made headlines in recent months making the case that commercial real estate prices were bottoming and that now is a good time to buy. That's an increasingly accepted view in multifamily, where the consensus outlook now seems to be that multifamily is well-positioned for growth by 2025-26 after working through the multi-decade-high supply wave. It'll be interesting to see if this deal pulls other institutional buyers off the sidelines. I suspect it will. The AIR acquisition provides a good comp for apartment owners -- and a reminder to buyers that they aren't likely to see great real estate at greatly discounted prices. Bigger discounts are more likely to come in lower-tier assets in less-desirable locations. #multifamily #apartments #CRE https://lnkd.in/gCtiRm-B

Blackstone Makes a $10 Billion Bet On Multifamily Units As Real Rents Begin Re-Accelerating… The Wall Street Journal's headline announced Blackstone's $10 billion acquisition of Apartment Income REIT, taking the company private. "The acquisition is Blackstone's largest transaction in the multifamily market," WSJ pointed out. This move signals the firm's bullishness on the rental housing market, especially when rents are beginning to re-accelerate. Blackstone agreed to purchase AIR Communities for $39.12 a share, representing a 25% premium to the company's closing share price on Friday. The deal is being completed through the investment management company's $30.4 billion global real-estate fund. Blackstone favors rental housing as one of the hottest places in the commercial property market to invest. The acquisition of AIR will give the investment manager exposure to 76 rental housing communities in coastal markets, including Boston, Miami, and Los Angeles. Blackstone has been aggressively increasing investments in CRE markets, a major bet the Federal Reserve's interest rate hiking cycle has plateaued and cuts near…. #blackstone #multifamilyrealestate #interestrates

When people ask me why now is the golden window to buy multifamily? Here are a couple of compelling reasons: · Supply-Demand Discrepancy: A significant disconnect exists between supply and demand, promising continued strong absorption and rental dynamics. · Homeownership Cost Barrier: With homeownership increasingly out of reach for many, there's a growing renter pool, further bolstering the rental market. · Bond Market Dynamics: While bond markets are relatively high (at least for this decade) pricing reflects this state. Anticipated interest rate cuts could tighten spreads, potentially boosting investment values. · Buyer's Market Advantage: Presently, it's a buyer's market, offering less competition and more unique opportunities. · Inflation Hedge: Commercial real estate remains as an attractive option for investors seeking to outpace inflation and build long-term wealth.   As noted by experts from Blackstone, investing during periods of uncertainty can yield immense upside. “You want to be investing into this dislocation because there's a lot of uncertainty. When that uncertainty passes, those investments begin to deliver accelerated return.” While deals may be challenging in today's market, the potential upside CRE is unprecedented. For those with a long-term outlook, there's arguably never been a more exciting time to enter the nipsey hussle marathon than today. https://lnkd.in/e6FfhsH4 #greysteel #cre #blackstone #realestate #multifamily #investing

A great take from Hamilton Point Investments, LLC via Multifamily Dive; curious to see if the "buying window" lasts through end of year or extends into 2025. TLDR, there are still good multifamily deals out there if you're doing it right! #multifamily #realestateinvestment #syndication

Unlocking the potential of commercial real estate (CRE) can be a game-changer for individual investors seeking stable, long-term returns. Unlike residential properties, CRE offers a broad spectrum of opportunities, from multifamily housing to warehouses and retail spaces. Investing in commercial real estate provides the comfort of owning tangible assets and the potential for consistent rental income. Plus, with REITs, you can dip your toes into this lucrative sector with relatively modest initial investments. Whether you're exploring publicly traded REITs or considering direct ownership, CRE can help balance your portfolio and provide steady returns. Ready to explore the world of commercial real estate? Start by reading up on REITs and tracking property trends to make informed decisions! #CommercialRealEstate #InvestmentStrategies #FinancialPlanning #REITs #RealEstateInvestment #StableReturns #PortfolioDiversification #LongTermInvesting

🏢 The US multifamily market stands firm as we kick off 2024, riding the waves of a historic boom over the last three years. 🌟 Despite a strong demand for apartment housing amidst a nationwide shortage, the development pipeline has eased in recent quarters. 💼📈 Stay tuned as we navigate this dynamic landscape! #MultifamilyMarket #StabilityAndDemand #passiveinvesting #passiveincome #buildingwealth #multifamilyinvestor #investing #realestateinvestor #propertyinvestment #investmentopportunity #investmenttips

Breaking down walls.... The older I get, and my body feels, I know I can't flip my way to retirement one house at a time. As an expert in flipping and a licensed RE professional for +5 years now, I've found my go-to strategy to build passive income through multifamily syndicators like Sterling Wealth Capital, which work by pooling together investors capital to invest in real estate. Unlike single family homes, multifamily properties offer investors economies of scale and demand that secure our investment even during uncertain times. With the ability to gauge renovation budgets and bring in cash flow from multiple units, it's no wonder multifamily is the top choice. It also nice not living in a construction zone all the time! #realestateinvesting #multifamily #investmentstrategy