Blackstone is looking to fill the lending gaps left by struggling regional banks reassessing their priorities.
The investment firm is in talks with several regional banks about buying assets and loans, CEO Stephen Schwarzman said in comments reported by Bloomberg.
Schwarzman said at the Qatar Economic Forum in Doha that Blackstone could “fill [a] void” as regional banks reconsider their participation in certain economic activities after the bankruptcy of several lenders across the country.
Blackstone, one of the world’s largest non-bank lenders, has had a tough few months for lending.
The company’s commercial mortgage arm recently increased its estimate of future bad loans from $125 million at the end of 2021 to $326 million last year. Office loans are a key part of this updated estimate, with rising interest rates also appearing to be a culprit.
In the first quarter, Blackstone reported a 36% drop in distributable profits as the company struggled to offload commercial assets in a frozen investment sales market. The company has also spent months limiting withdrawals from its real estate investment trust.
Some regional banks are making deals to avoid the same fate as defaulting regional lenders of late, including Silicon Valley Bank, Signature Bank and First Republic Bank.
Beverly Hills-based Pacific Western Bank agreed this week to sell $2.6 billion in construction loans to Kennedy-Wilson Holdings. The real estate investment firm took out 74 loans from the troubled lender at a discounted price of $2.4 billion.
A few days later, PacWest agreed to sell its multifamily lending division, Civic Financial Services, to Roc360 for an undisclosed price. Although Roc360 assumes business operations of the division, the agreement does not include previously extended loan or loan servicing operations; the division made loans of about $3 billion last year.
— HoldenWalter Warner