Private Equity Likes the Look of Blackstone’s Real Estate Model

In January the 800 Fifth tower in Seattle was sold for $540 million—the biggest commercial real estate transaction in the Northwest in three years. The buyer isn’t a typical developer, but investment firm Blackstone, a longtime leader in private equity. The company also recently bought five office blocks and a mall for $1.3 billion in Shanghai. Last fall, Blackstone and a partner bought thousands of railroad arches in England, many of which have been converted into retail spaces, for $1.9 billion.

With everything from hotels to office buildings to single-family homes, Blackstone Group LP—much better known for leveraged buyouts and its chief executive officer’s taste for lavish birthday parties—is now the world’s largest landlord. Its portfolio, at $136 billion, is bigger than the market value of the largest real estate investment trust in the S&P 500.