Just a quick revisit.
As far as I am concerned, Blackstone has lost it’s way and should fire their entire real estate division. Why? Watch the video above. Their investment thesis in real estate is very simple. 1. The bottom is in. 2. There is a massive housing shortage. 3. Real estate prices will continue to rise. That sounds great, except for one thing, it’s a bunch of BS that can easily be discredited.
Now, remember, while these guys have been somewhat correct thus far by being one of the largest real estate buyers/investors in the nation, the market hasn’t spoken yet. All they have done is bought a huge amount of illiquid real estate that they will be unable to unload when a bear market in real estate prices resumes. As often is the case, one minute you are a financial genius and a half an hour later you are a retarded idiot (after the market moves against you).
I wrote about this before and I continue to stand by my opinion. Good luck unloading your illiquid real estate Blackstone.
In another sign that the “Dead Cat Bounce” for the Real Estate market is now over, Blackstone Group has announced that it’s real estate acquisition pace has slowed 70% from last years pace due to higher prices. In fact, this is the trend seen across the industry. Investors, hedge funds, institutions are all slowing down their real estate acquisitions to the tune of 70-90%.
“The institutional wave has passed,” Gray, who oversees almost $80 billion in property investments, said in a telephone interview. “It’s at a much lower level than it was 12 or 24 months ago.”
What happens next?
Easy. The real estate market might hover here for some time. Not too long thought. As soon the Bear Market of 2014-2017 hits and the US falls back into a severe recession, you will see housing going down once again. Once investors realize where we are in the real estate cyclical composition (dead cat bounce and not expansion) you will see the likes of Blackstone trying to get rid of their properties as fast as possible. With investors heading for the doors, mass volume of real estate should hit the market. Collapsing existing values just as fast, if not faster, than their initial ascend between 2010-2014.
Good luck selling your 43,000 rental properties Blackstone.
What Happens When Blackstone Starts Dumping Real Estate At Market? Google