- Experts weigh in on Blackstone’s $12B CMBS industrial, believing it reflects positive trend shifts in the retail sector.
- $156B in maturing industrial loans spurs Blackstone into active refinancing with growth in new deals.
- Blackstone’s $1.38B BX 2024-MDHS deal came in at a 5.5% cap rate with strong assets.
Blackstone (BX) aims to refinance $12B worth of CMBS loans, emphasizing strong confidence in its industrial property portfolio.
Industrial dominance
Blackstone’s real estate arm is on track to refinance $12B in commercial mortgage-backed securities (CMBS) this year, with $7.5B of those loans tied to industrial properties.
The $12B figure easily surpasses the $2.4B Blackstone refinanced in the first four months of 2023 but comes close to the $11.9B refinanced in 2022. Notably, only $2.6B in industrial single-borrower CMBS deals came through last year.
This massive spike in industrial refinancings indicates favorable market perceptions for the long-term outlook for both the industrial and retail sectors.
Gaining momentum
This year’s industrial refinancing activity stems from the $156B in maturing industrial loans. Despite a slowdown in e-commerce growth, the industrial sector remains dependably resilient, driven by continued demand from various retail sectors seeking expedited deliveries, including groceries.
Delinquencies on industrial loans are also down across major property types, according to the Mortgage Bankers Association.
Solid loan structure
The upcoming Blackstone-backed $1.38B deal, BX 2024-MDHS, is the 11th of the year for the investment giant and showcases strong industry interest in institutional loans on industrial properties.
The loan features a 5.5% interest rate cap and will be co-originated by Bank of America (BAC), Bank of Montreal (BMO), JPMorgan Chase (JPM), Societe Generale, and the Bank of Nova Scotia (BNS).
The loan is secured by 17.1MSF across 142 BREIT assets, mostly industrial, in 15 states. Georgia and Florida account for over half of the asset backing. Although base rent is 17.1–33.3% below market rents, Blackstone doesn’t seem to mind.
Proceeds from the deal will be used to refinance $713.3M in debt, fund a $135M reserve, and return $490.3M equity to BREIT, per KBRA.
Why it matters
Blackstone’s sizeable $12B in CMBS refinancings—several times larger than what the firm refinanced across CRE sectors 12 months ago—reveal institutional confidence in industrial and an optimistic outlook for retail, despite potentially cooling demand.
