The investment firm Blackstone has filed hundreds of eviction cases against its tenants in Georgia and Florida, the Financial Times reported on Monday.Data compiled by the Private Equity Stakeholder Project, a nonprofit advocacy group that tracks private-equity investment in housing and other sectors, shows that Blackstone's eviction filings significantly increased since July. In Florida, Blackstone has filed 382 evictions since July. It's filed another 311 cases in Georgia.
The Private Equity Stakeholder Project's research found another 104 eviction filings in Clark County, Nevada, home to Las Vegas, as well as 125 cases in Maricopa County, Arizona, where Phoenix is.Jim Baker, the Private Equity Stakeholder Project's executive director, told the Financial Times that Blackstone's status as one of the country's biggest landlords means its actions resonate widely."Given Blackstone's massive role in the housing market, the firm's recent move to evict tenants threatens housing stability for families in the US and around the world," he said. Blackstone owns more than $326 million worth of real estate across the country. About one-fifth of those holdings are tied up in an investment vehicle known as the Blackstone Real Estate Investment Trust, or BREIT.
Over half of BREIT's $69 billion portfolio is made up of rental housing, and 97% of those holdings are in the US.Blackstone's head of real estate for the Americas, Nadeem Meghji, told employees in an internal company call in December that Blackstone was "seeing a meaningful increase in economic occupancy as we move past what were voluntary eviction restrictions."Meghji added that Blackstone was predicting high-single-digit growth for rents in its student-housing and affordable-housing holdings in 2023. Meghji suggested he was confident that the evictions would help contribute to Blackstone's future "cash-flow growth."Evictions have been increasing across the country as landlords of all sizes seek to recoup money they lost during the pandemic because of federal and state eviction moratoriums. Data from Princeton's Eviction Lab, which monitors 32 cities and nine states, shows that more than 9,300 eviction cases were filed in the first week of January, compared with just over 7,700 cases filed during a week at the end of December.
A Blackstone representative told Insider the company had "the most favorable resident policies among any large landlord in the US."The representative said the firm waived late fees, provided more flexibility for tenants to cancel their leases, offered rental assistance, and allowed tenants to enter payment plans if they were behind on rent — policies that went further than the requirements of the moratoriums that prevented landlords from evicting their tenants during the pandemic. The federal moratorium ended in August 2021, but Blackstone's tenant-relief efforts continued well into 2022."Eviction is always a last resort," the representative said.Blackstone's real-estate portfolio is outperforming competitorsThe news of Blackstone's increasing eviction efforts came days after the company announced its fourth-quarter earnings. It said its total assets under management — which covers all Blackstone's businesses, not just real estate — grew by 11% year over year, to about $974 billion.
Blackstone also said its core real-estate portfolios have performed well with room for even more upside. For example, what Blackstone calls its "opportunistic" real-estate portfolio appreciated by more than 7% during 2022 in one of the most challenging markets in recent memory. The firm's core real-estate portfolio gained more than 10% in value during 2022.BREIT specifically has outperformed several publicly traded REITs.
The fund's website indicates that as of December 31, it had produced an annualized return of 8.4%. For comparison, Vanguard's real-estate index fund lost more than 17% of its value over the past year, while iShares' Core US REIT lost more than 14% of its value.