Blackstone is the largest commercial landlord in history. Over the past two decades, it has taken control of apartment blocks, student housing, railway arches, film studios, offices, logistics warehouses and datacentres. 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. If you wear Spanx, have ever matched with someone on Bumble, stayed in a Hilton hotel or a Cent er Parcs resort, visited Legoland, the London Dungeon or a relative at a Southern Cross care home, you have encountered a company that forms, or recently formed, part of the Blackstone empire.
Blackstone’s New York headquarters are in a skyscraper on Park Avenue. Every Monday, the firm’s founder Steve Schwarzman and chief operating officer Jon Gray gather with senior partners around a conference table to discuss investment memos sent the previous week by teams in the company’s 26 offices in the US, Europe and Asia. It’s here that Blackstone’s investment decisions are made. 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.
Blackstone is an asset manager, a type of financial firm that invests the wealth of pension funds and insurance companies. It is not to be confused with BlackRock, an asset management firm founded by Larry Fink, who worked for Blackstone in the 1980s. In 1994, BlackRock became independent and Blackstone sold its shares in the company. Fink’s company dwarfs Blackstone, but when it comes to property, Blackstone is the giant. Its $320bn real estate portfolio is more than six times larger than that of BlackRock. “For Blackstone, real estate is the goose that lays the golden egg,” Brett Christophers, author of a forthcoming book about the asset management industry, told me.
In the 2000s, Blackstone’s real estate division was known for buying up office spaces and hotels. Now, it seems to prefer life-science laboratories and warehouses rented out to last-mile delivery firms. But it is Blackstone’s interest in another type of real estate that has attracted the most scrutiny. In recent years, it has become known for creating a profitable asset class from residential properties – in other words, buying up homes. Although Blackstone insists 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.
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. “It was like drinking from a firehose in the world of real
