At Blackstone's $339 Billion Property Arm, the Honeymoon Is Over

Nadeem Meghji was on honeymoon in late 2022 when the biggest storm to have rocked Blackstone Inc.’s property business hit its peak.

The private equity behemoth had just capped withdrawals from the Blackstone Real Estate Income Trust (BREIT), a fund at the vanguard of its money-spinning push to win the hearts of retail investors. As head of the firm’s US property division, Meghji was at the eye of the tempest — newlywed or not.

From a lakeside resort on New Zealand’s South Island surrounded by snow-capped mountains he toiled through the night, helping broker a deal with the University of California to inject $4 billion into the fund as a show of confidence. Next morning he chatted with Blackstone President Jon Gray, another real-estate luminary who happened to be holidaying nearby.

“I promised my wife that this would be the exception rather than the rule in our marriage,” Meghji recalls in an interview with Bloomberg.

Whether he keeps that pledge isn’t entirely in his hands. Meghji has since then been put in charge of the firm’s entire $339 billion global property arm, the world’s biggest real-estate investor, alongside ex-Goldman Sachs Group Inc. staffer Kathleen McCarthy. With his industry reeling from higher-for-longer interest rates, the promotion couldn’t have come at a harder time.

BREIT’s situation has dominated headlines lately, including its sweetening of a student-dorm sale by offering financing support to the buyer. But the huge opportunistic real-estate funds with which Blackstone made its name, and which remain at the core of its business, are also facing their own epochal challenge. Awash with cheap money, these funds — and those of fellow private equity titans — conquered global property markets in past decades. Central bankers have demolished that era’s certainties.