Blackstone Real Estate Income Trust Inc., a publicly registered non-traded real estate investment trust sponsored by private equity giant Blackstone (NYSE: BX), has agreed to purchase American International Group Inc.’s (NYSE: AIG) interests in a U.S. affordable housing portfolio for approximately $5.1 billion, in an all-cash transaction. This transaction is subject to customary closing conditions and is expected to close in the fourth quarter of 2021.
Peter Zaffino, AIG’s president and chief executive officer, said that the firm has “stewarded” the affordable housing portfolio for more than 30 years, but the assets are “no longer core to AIG’s long-term investment strategy.”
“These communities provide critical affordable housing, and we look forward to being long-term owners,” said Kathleen McCarthy, global co-head of Blackstone Real Estate. “We will make significant investments to improve the apartments while ensuring they remain affordable and in compliance with all rent regulations.”
Late last month, The DI Wire reported on Blackstone REIT’s agreement to purchase Home Partners of America, which owns approximately 17,000 single-family rental homes across the United States, in a deal valued at $6 billion.
Separately, Blackstone (NYSE: BX) agreed to purchase a 9.9 percent equity stake in AIG’s Life and Retirement business for $2.2 billion in an all-cash transaction. As part of this agreement, AIG will enter into a long-term strategic asset management relationship with Blackstone to manage an initial $50 billion of Life and Retirement’s existing investment portfolio upon closing of the equity investment, with that amount increasing to $92.5 billion over the next six years.
The transactions are expected to close simultaneously by the end of the third quarter of 2021, and upon closing, Jon Gray, president and chief operating officer of Blackstone, will join the Life and Retirement board.
American International Group is a global insurance organization that provides property casualty insurance, life insurance, and retirement other financial services to customers in approximately 80 countries and jurisdictions.
Blackstone Real Estate Income Trust invests primarily in stabilized, income-generating U.S. commercial real estate, and to a lesser extent, in real estate debt investments. The REIT launched in August 2016 and has raised $26.6 billion in three public offerings as of April 2021. The REIT has raised $4.6 billion in the current offering, as of mid-June 2021.