Blackstone is closing out the first quarter with a pair of commercial mortgage-backed securities transactions, including a deal tied to its $2.3 billion, all-cash acquisition of Hawaii landlord Alexander & Baldwin.
The two deals, one backed by a sprawling Hawaii commercial portfolio, the other by a Sun Belt multifamily portfolio, wrap up an active quarter of single-asset, single-borrower deals.
The two offerings would bring the number of Blackstone-backed single-borrower bond deals in the first quarter to eight, totaling $11.2 billion. The activity amounts to 45% of all the CMBS deals in the quarter, which has seen 33 deals totaling $24.9 billion.
Blackstone's move to absorb an entire Hawaii-based real estate investment trust and immediately securitize the debt underscores the private equity giant's confidence in need-based, grocery-anchored retail. The dual CMBS execution also demonstrates Blackstone's ability to move multiple large financing structures simultaneously.
Blackstone declined to comment to CoStar News.
The first transaction, BX 2026-ALOHA, carries a $1.24 billion floating-rate mortgage loan secured by Blackstone's agreement to acquire Alexander & Baldin. The bond deal is backed by 37 Hawaii properties totaling 3.8 million square feet, according to bond rating firm KBRA. The portfolio spans retail, industrial and office assets across Oahu, Maui, Kauai and the Big Island.
Five lenders, comprising Wells Fargo, Citi Real Estate Funding, German American Capital, Goldman Sachs Mortgage and Santander Bank, are expected to co-originate the loan by the end of the quarter, according to KBRA analysis.
The interest-only loan carries an initial two-year term with three 1-year extension options. Blackstone contributed $518 million in cash equity alongside the mortgage proceeds to fund the acquisition, closing costs and related expenses.
The portfolio was 92.7% leased as of March to more than 670 tenants, KBRA noted. Safeway anchors the retail component, representing 7% of base rent. Sixteen high-quality creditworthy tenants collectively account for 16.7% of retail base rent.
The second transaction, BX Trust 2026-RISE, totals $845.2 million and is secured by 12 multifamily properties comprising 4,922 market-rate units spread across six Sun Belt and Sun Belt-adjacent states, according to analysis from Morningstar DBRS.
Georgia leads the portfolio at 32.5% of the allocated loan amount, followed by Florida, North Carolina, Texas, Colorado and Arizona. Atlanta is the largest single market exposure at 32.5%.
Blackstone acquired the properties for $1.2 billion between May and July 2021 and has invested about $50.3 million, or roughly $10,218 per unit, in capital improvements since then, Morningstar DBRS said. More than $20 million went toward in-unit upgrades, including new appliances, bathroom renovations and flooring. The remaining $30 million covered exterior and maintenance projects.
The portfolio absorbed the Sun Belt's well-documented supply surge. Rents fell 6.4% from 2022 to 2025 as new luxury projects pressured the market and economic vacancy climbed to 9% from 8.2% in 2022, Morningstar DBRS said. Despite those headwinds, net cash flow rose 26.6% over the same period.