Business Specialties Investments
Nov 12, 2007
By: Dees Stribling, Midwest Correspondent
The Blackstone Group L.P., architect of this year's mammoth buyouts of Equity Office Properties Trust and Hilton Hotels Corp., has reported a third-quarter decline in revenues from its real estate holdings. Revenues for the third quarter of 2007 were $109.1 million, compared with revenues of $196.1 million in the third quarter of 2006, according to the company.
"Gains in the portfolio were down this quarter compared to last year, because the real estate market isn't seeing the same sort of price appreciation as last year," said Stephen Schwarzman, Blackstone’s chairman & CEO, during this morning's conference call about the company's third quarter returns. "Indeed, commercial real estate prices are softer in general."
Nevertheless, Schwarzman put an optimistic spin on things, saying that Blackstone's portfolio is doing comparatively well. "In major cities on the coasts, commercial rents are increasing," he said. "In the hotel market, RevPAR (revenue per available room) is holding up, and replacement costs are still rising, with the cost of construction going up."
Schwarzman also made a point to say that Blackstone owns "very little housing assets--less than half a percent of the total." That comment came not long after he said that "the mortgage black hole is worse than anyone thought--deeper, darker and scarier than what the banks thought."
In a broader financial context, Blackstone reported a loss of $113.2 million for the quarter, compared with net income of $372.5 million a year ago. According to the company, the loss was due to compensation costs associated with Blackstone's IPO earlier this year.
By: Dees Stribling, Midwest Correspondent
The Blackstone Group L.P., architect of this year's mammoth buyouts of Equity Office Properties Trust and Hilton Hotels Corp., has reported a third-quarter decline in revenues from its real estate holdings. Revenues for the third quarter of 2007 were $109.1 million, compared with revenues of $196.1 million in the third quarter of 2006, according to the company.
"Gains in the portfolio were down this quarter compared to last year, because the real estate market isn't seeing the same sort of price appreciation as last year," said Stephen Schwarzman, Blackstone’s chairman & CEO, during this morning's conference call about the company's third quarter returns. "Indeed, commercial real estate prices are softer in general."
Nevertheless, Schwarzman put an optimistic spin on things, saying that Blackstone's portfolio is doing comparatively well. "In major cities on the coasts, commercial rents are increasing," he said. "In the hotel market, RevPAR (revenue per available room) is holding up, and replacement costs are still rising, with the cost of construction going up."
Schwarzman also made a point to say that Blackstone owns "very little housing assets--less than half a percent of the total." That comment came not long after he said that "the mortgage black hole is worse than anyone thought--deeper, darker and scarier than what the banks thought."
In a broader financial context, Blackstone reported a loss of $113.2 million for the quarter, compared with net income of $372.5 million a year ago. According to the company, the loss was due to compensation costs associated with Blackstone's IPO earlier this year.
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