Blackstone in talks to buy stake in New York City office building: Report

New York: Blackstone is in talks to buy a sizeable stake in a New York City 50-story office building from institutional investors of JPMorgan Asset Management, two sources familiar with the matter said on Thursday.

The planned move comes as Blackstone executives signaled on an earnings call earlier in the day that the troubled commercial real estate sector was stabilizing.

The Manhattan building, 1345 Avenue of the Americas, is jointly owned by institutional investors advised by J.P. Morgan Global Alternatives and Fisher Brothers.

JPMorgan Asset has no equity interest in the building, which is partly owned by its institutional investors, one of the sources said.

Blackstone and JPMorgan Asset Management declined to comment. The sources declined to be named because the talks are not public.

Risks in commercial real estate, particularly within the office sector, had been exacerbated by elevated interest rates and the widespread adoption of remote and hybrid work models in the post-pandemic era.

Monetary policy easing by the U.S. Federal Reserve has begun to show early signs of relief for the sector. In addition, several top corporate giants in the U.S., including JPMorgan Chase and Amazon, have mandated strict return-to-office policies for most employees, improving the demand outlook for office space.

"We remain firm believers that a sustained commercial real estate recovery is underway," Blackstone President Jonathan Gray said in a post-earnings call with analysts on Thursday.

In 2023 law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP signed a 20-year, 765,000 square-foot lease, initially occupying 18 floors of the Avenue of the Americas' building, according to an announcement then.

Blackstone's Gray cited a "pretty healthy U.S. economy" and a decline in borrowing costs as key factors behind the firm's forecast for a recovery in real estate in 2025.

Blackstone's real estate business, which manages $315.4 billion in total assets, saw inflows of $27.9 billion in 2024.

Bloomberg News earlier reported Blackstone's talks to buy the building.