What do we think about Muddy Waters’ bearish thesis on Blackstone Mortgage Trust and CRE values in 2024?
To my understanding, as of Q3, BXMT’s portfolio consists of 35% institutional-grade office, and 95% of their net loan balance is continuing to perform.
| +34 | Where are free agents signing? | 14 | 3h |
| +31 | Uncertain of what To Do Next | 5 | 4d |
| +29 | Capital Restricted Developer | 4 | 7h |
| +28 | Laughable Job Posting | 7 | 10h |
| +23 | Warning: J. Shaw Recruiters | 5 | 5d |
| +8 | Development Budget: use RENTABLE or GROSS BUILDABLE sf? | 3 | 1d |
| +6 | First-year REPE analyst comp check (London) | 1 | 6d |
| +4 | Vandy MSF or NYU MSRE | 4 | 4d |
| +4 | Shops with largest intern classes | 5 | 4d |
| +4 | In RE, what is the ONE software tool you couldn’t survive without? | 3 | 12h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Based on the most helpful WSO content, it's clear that the future of commercial real estate, including institutional-grade office spaces, is a hot topic of debate. The ongoing changes in work culture and the impact of the pandemic have made predictions quite challenging.
As for Muddy Waters' bearish thesis on Blackstone Mortgage Trust (BXMT), it's important to remember that these are predictions based on their analysis and perspective. They might be considering factors such as potential long-term shifts towards remote work, which could impact the demand for office spaces, and hence, their value.
However, as you've mentioned, 95% of BXMT's net loan balance is continuing to perform, which indicates that their portfolio is still largely stable. The fact that 35% of their portfolio consists of institutional-grade office could be seen as a strength, given that these types of properties tend to attract stable, long-term tenants.
In the end, the future of CRE values in 2024 will depend on a multitude of factors, including economic recovery, changes in work culture, and the ability of companies like BXMT to adapt to these changes. It's a bit like swinging from vine to vine in the jungle - you have to time it right and adjust your grip as needed.
Remember, investing always involves risks, and it's important to do your own research and consider multiple perspectives before making decisions.
Sources: Will office be the buy of the century this correction or is it dead?, Sleeper EB/MM, Tides Equities?, Thoughts on BentallGreenOak ??
Isn't the big issue the rate caps start expiring next year so the assets themselves will have to start covering debt service?
Blackstone has a weird rate cap process. They do it themselves from their parent company, I assume this gives them better pricing due to scale.
I wouldn’t give too much credence to Muddy Waters…
Doloribus est reiciendis commodi aspernatur natus. Ex suscipit iste velit sit vitae sed. Illum deleniti veniam est aut esse.
Voluptatibus sapiente voluptas quod delectus facere aut distinctio. Quas qui autem tempora ea corrupti. Sint magnam aut et doloremque quia quibusdam in. Laborum quasi doloremque sit et odit aut. Eos velit mollitia nihil fugiat.
Corporis sapiente unde laboriosam beatae non. Animi eum fugiat minima porro.
Iste consequatur corrupti doloremque necessitatibus incidunt ut ullam. Quisquam qui est sed quos veniam ad cumque exercitationem.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...