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Big Managers Post 2nd-Quarter Gains

Four of the biggest public real estate managers reported positive gross returns in the second quarter.

Results ranged from 1.4% to 4.4%, according to a review by Hodes Weill & Associates. The results were unexpected given the crushing impact of the coronavirus pandemic on property trades and downward pressure on valuations. Plus, the four firms – Apollo Global, Ares Management, Blackstone and KKR – all reported first-quarter write-downs of 1% to 8.8%.

Still, Blackstone president Jon Gray, in his firm's second quarter earnings call, said the first-quarter write-downs ’s second quarter earnings call, said the first-quarter write-downs across real estate vehicles were “temporary, reflecting a moment of great dislocation and . . . should reverse given time. You can see that recovery underway in our second quarter returns.”

Gray attributed the positive returns to Blackstone’s investments in “sectors that are resilient to Covid-related headwinds,” including industrial and life-science properties.

Doug Weill, co-founder of New York-based Hodes Weill, said the positive returns indicate that some of the biggest real estate owners feel operating fundamentals are stronger than many believe.

Property listings have picked up in the past few months, and many industry observers are looking ahead to see how third quarter returns fare.

“When we speak to managers and others in the industry, the fall is a pivotal moment for the industry,” Weill said. “Everyone is watching the next 60 days.”


View the PDF here.

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All U.S. regulated capital market and securities advisory services are provided by Hodes Weill Securities, LLC, a registered broker-dealer with the SEC, and a member of FINRA and SIPC, and internationally, by non-U.S. Hodes Weill affiliates.