(Bloomberg) -- Blackstone Inc. is selling commercial mortgage bonds to help pay for its planned $10 billion purchase of AIR Communities, an apartment landlord.
The $2 billion offering, which is being structured by Wells Fargo and will have floating interest rates, is backed by a portfolio of 19 apartment properties, according to people with knowledge of the matter.
The offering could wrap up by the end of this week, according to the people. A spokesperson for Blackstone declined to comment.
The deal comes three months after Blackstone said it had agreed to buy Apartment Income REIT at a premium to the company’s share price. Blackstone said at the time that it plans to invest more than $400 million to maintain and bolster the company’s apartment portfolio.
That purchase was Blackstone’s latest housing bet, coming shortly after it agreed to pay $3.5 billion to take single-family landlord Tricon Residential private. Blackstone President Jon Gray has said that real estate values are bottoming, as his firm looks to put money to work.
Blackstone has accounted for a significant share of activity in the market for commercial mortgage backed securities this year, where it has mainly focused on refinancing older CMBS deals in order to benefit from tightening risk premiums in that market. As of May, it was responsible for around 50% of all deals by dollar amount in the single-asset single-borrower portion of the market in 2024.
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