Blackstone question
Not sure if this is a stupid question but is Blackstone considered an “owner/operator”?
I was recently reading an article in The Real Deal with the largest NYC property owners and Blackstone was listed in the top 5 alongside the likes of obvious ones like SL Green, Tishman, Vornado, Brookfield, RXR, etc who are considered owners/operators/landlords. I’ve always just associated BX as a large PE fund manager with massive investments across RE.
So is BX actually considered a landlord at least in NYC?
When a property is purchased, the usual structure is 55-70% loan-to-cost with the remaining 45-30% of needed equity split between two partners - a majority LP investor and a minority GP investor. The GP equity partner is the owner/operator which is responsible for day-to-day management of the property. This may include solely asset management of third party leasing/property management/etc... or fully vertically integrated leasing/property management. The LP partner capitalizes the majority of the equity, 80% to 95%, and incentivizes the GP partner to successfully manage the property by allowing GP to be distributed a CF split in excess of there equity share after achieving a certain level of performance, typically an IRR lookback, the "promote".
Blackstone is an LP investor - I do not believe they operate in any capacity. They passively capitalize deals and monitor/asset manage from a high level without making day-to-day decisions.
someone correct me if i'm wrong but you can legally be 'the operator' without self-managing. if you buy a big office building and you control it but you 3rd-party out the day-to-day mgmt, i would still say you're an office operator. maybe i'm wrong to say that though.