Blackstone’s Real Estate Returns Sag Amid Trade War Headwinds

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Good morning. Despite hauling in record capital, Blackstone's real estate profits took a nosedive in Q1, with trade war turbulence and cautious investors putting dealmaking on ice.

Today's issue is sponsored by Vintage Capital: invest in recession-resilient Mobile Home Parks.

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Market Snapshot

EARNINGS REPORT

TOGETHER WITH VINTAGE CAPITAL

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• At a crossroads: This week, CRE Daily, we'll be joining thought-leaders across industries and the globe at the 2025 Real Estate Symposium at Harvard. Get 10% off with the CRE Daily discount!  (sponsored) 

• Growing gap: Credit spreads in CRE are widening as tariffs and economic uncertainty push lenders to tighten credit across property types.

• Penn takeover: The Trump administration plans to seize control of Penn Station’s $7 billion renovation from the MTA, criticizing local mismanagement and pushing for a private-sector partnership led by Amtrak.

• Tax creep: U.S. property tax growth slowed to 2.7% in 2024, but a record 19 counties now average over $10,000 annually, with the highest bills concentrated in the Northeast and California.

• Stress test: The Fed proposed easing stress test rules for banks, sparking criticism over weakened oversight and potential loopholes.

• Stabilized leases: The Rent Guidelines Board proposed a 6.25% rent hike, but with approval uncertain, landlords are now calling for city intervention.

• Positive outlook: Senior housing is expected to see rent growth and flat cap rates in 2025, driven by rising demand and investor confidence.

• Tariff tension: New U.S. steel and aluminum tariffs are expected to raise construction costs and slow multifamily development in fast-growing markets like Milwaukee, Oklahoma City, and Memphis.

• Cracking down: San Diego bans rent algorithms over price collusion concerns, joining other cities in regulating AI-driven rental pricing tools.

• Blackstone buy: Blackstone acquired the 359-unit Solea at Miami Lakes for $116M, expanding its South Florida multifamily footprint as Greystar continues to offload new developments.

• Florida debut: Walmart opened a 1M-square-foot distribution center in Jacksonville, FL, to boost supply chain efficiency across the Southeast and Puerto Rico.

• Cutting ties: JLL is laying off nearly 400 employees after losing an Amazon facilities contract, as the tech giant shifts to managing roles in-house.

• OC deal: Rexford Industrial sold a 102K-square-foot Lake Forest property for $51M, fetching $498 per square foot amid strong leasing and rising rents.

• Fine dining: Orlando stole the culinary spotlight in Michelin’s latest Florida rankings, landing a prestigious new two-star restaurant while Miami’s momentum slowed.

• Lease pressure: Discount chain Gabe’s has tapped A&G Real Estate Partners to renegotiate store leases after missing April rent payments in a bid to ease financial strain.

• Big breaks: NYC’s 2025–26 assessments show big property tax breaks for office landlords, while residential owners face a broken appeals process.

• Midtown lease: Amazon expands its office footprint with a 330K SF lease at 10 Bryant Park, boosting NYC presence amid office return push.

• Earnings report: SL Green, New York City’s largest office landlord, reported 91% occupancy in Q1, though cash flows declined amid continued market headwinds.

📈 CHART OF THE DAY