Blackstone Scoops Up $2B in Discounted CRE Loans

The private equity giant is doubling down on distressed commercial debt as regional banks look to unload legacy loans.

Jordan B.
June 30, 2025

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Good morning. Blackstone is doubling down on distressed commercial debt as regional banks look to unload legacy loans. Plus, the Federal Housing Administration plans to cut all multifamily premiums.

Today’s issue is sponsored by Bullpen—your connection to the top commercial real estate talent.

🎙️ This week on No Cap podcast, Rich Hill, Global Head of Real Estate Strategy at Principal, breaks down what’s really driving CRE in 2025—from misunderstood office sentiment to where the smart money is heading next.

Market Snapshot

S&P 500

GSPC

6,173.07

Pct Chg:
+0.52%

FTSE NAREIT

FNER

760.68

Pct Chg:
+0.33%

10Y Treasury

TNX

4.257%

Pct Chg:
-0.026

SOFR

30-DAY AVERAGE

4.303%

Pct Chg:
-0.00

*Data as of 06/27/2025 market close.

DEAL OF THE DAY

Blackstone Bags $2B in CRE Loans at a Discount from Atlantic Union

Blackstone is purchasing $2 billion in commercial real estate loans at a discount—around 7% off face value—from Atlantic Union Bankshares.

Deal details: The loans—backed by multifamily and neighborhood retail properties—originated from Sandy Spring Bank, which Atlantic Union acquired in April 2025. Though these loans are performing, they were issued before the Fed began raising rates in 2022, which has since depressed their market value. Blackstone paid roughly $0.93 on the dollar.

Merger-made opportunity: Thanks to its merger with Sandy Spring, Atlantic Union was able to mark the loans to market ahead of the sale, avoiding a loss on the transaction. The bank now plans to redeploy the capital into higher-yielding assets and reduce funding costs, freeing capacity for new lending.

Blackstone’s strategy: This acquisition is part of Blackstone’s $20 billion push into distressed but performing CRE debt. Its real estate debt unit—managing $76 billion—has been stepping in where regional lenders are retreating, capitalizing on discounted pricing and bank balance sheet constraints.

➥ THE TAKEAWAY

Banks under pressure: With smaller banks still holding the majority of U.S. CRE loans, rate-driven markdowns and regulatory pressure are opening the door for more discounted loan sales—especially in the wake of mergers.

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✍️ Editor’s Picks

Smarter capital: Investors are doubling down on CRE using AI-driven platforms and tax strategies like QOZs to boost returns. (sponsored)
Ceiling lifted: Manhattan is seeing a surge in air rights deals following NYC’s “City of Yes” rezoning, which expanded transfer zones and simplified approvals.
Access expanded: The House passed a bill to let professionals qualify as accredited investors based on experience or education, not just wealth.
Financing boost: The FHA will slash all multifamily mortgage insurance premiums to 25 basis points—the lowest legally allowed rate.
Fruitful legacy: David Murdock, the billionaire real estate mogul and longtime owner of Dole Food, has passed away at the age of 102.
Tax win: The Senate dropped the “revenge tax” from the budget bill, calming foreign investor concerns and handing CRE a key policy win.
Island takeover: Ivanka Trump and Jared Kushner are transforming Albania’s untouched Sazan Island into a $1.4B ultra-luxury resort

🏘️ MULTIFAMILY

Hidden vacancy: Rent growth in multifamily housing remains muted in 2025, as a surge of pre-stabilized new units continues to weigh on market performance.
Affordability crunch: In Q2 2025, 99% of U.S. counties saw home costs exceed norms, with median-priced homes consuming 33.7% of average wages—up from 32% in Q1 and far above the 28% benchmark.
Next-gen renters: A new SmartRent survey reveals that 56% of renters are ready to relocate, with Gen Z leading the way.
Slow season: Multifamily rent growth is slowing heading into summer 2025, with national averages rising just 0.2% monthly, though no severe downturn is expected.
Reno rents rise: Multifamily demand in Reno surged in Q1, with net absorption more than doubling YoY.

🏭 Industrial

Renter’s market: Bulk rents dip and tenant power grows as industrial lease expirations and trade shifts reshape the market.
Ports under pressure: Industrial markets are adapting to policy whiplash, with vacancy rates holding at 8.5%, new construction slowing sharply, and shifting trade dynamics reshaping port activity.
Power play: Despite global power constraints, data center growth is accelerating, driven by hyperscalers, AI demand, and aggressive preleasing.
Fully leased find: Rhino Capital acquired a fully leased 218K SF industrial property near Boston for $27.9M, adding to the region’s active industrial investment streak.

🏬 RETAIL

Sinking ship: Wolfpack Research accused CTO Realty Trust of misleading investors with inflated earnings metrics and excessive dilution.
Flagship focus: URW is doubling down on elite US malls, shedding weaker assets while redeveloping its top-tier centers.
Brickell buyout: Simon Property Group has acquired full ownership of Miami’s Brickell City Centre retail and parking assets for $512M.
Late night latte: Yemeni coffeehouses like Haraz are rapidly expanding across the US, tapping into demand for late-night, alcohol-free social spaces.
Craft store comeback: Michaels saw sales rise 2.3% last quarter, gaining business from shuttered rivals Party City and Joann while avoiding fresh financing despite ongoing tariff risks.
Grocery cutbacks: Kroger will shutter 60 Ralphs and Food 4 Less stores nationwide over 18 months amid flat sales and leadership changes.

🏢 OFFICE

Apple expands again: Apple purchased a $167M office campus near its Cupertino HQ, adding 220K SF as part of a broader $500B US investment.
Office confidence: Capstone Equities is buying a fully leased Chelsea office building for $83M, continuing its NYC office push.
Growing footprint: The United Nations has renewed and expanded its office lease in Manhattan, taking nearly all of 2 UN Plaza

🏨 HOSPITALITY

Casino endorsement: Rev. Al Sharpton has backed SL Green’s $4B Times Square casino bid with Caesars and Roc Nation.
Events are back: As more workers return to offices, caterers are cashing in on a corporate events boom.
Leadership change: Sonder CEO Francis Davidson has resigned amid ongoing financial troubles, with board chair Janice Sears stepping in as interim CEO.

A MESSAGE FROM IWF

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📈 CHART OF THE DAY

71% of CRE investors are sitting tight—the highest “hold” rate in Fear & Greed history. As rates stay elevated and policies remain in flux, few are eager to make big moves.