China's Real Estate Connection

Schwarzman’s Blackstone has been a big seller to Chinese companies. Will it want to buy anything back?

- Gillian Tan And Sarah Mulholland, With Amanda L. Gordon

In February 2017, Stephen Schwarzman toasted Wang Jian, co-chairman of HNA Group, at a charity event at Manhattan’s Park Avenue Armory. Wang lauded the billionaire Schwarzman as a “god of fortune” and a man with the “key to opening up the chest of treasures.” Fourteen months later, Wang has had an unexpected change in fortune— and Schwarzman and his Blackstone Group LP may be uniquely placed to unlock some of HNA’s real estate treasures.

Chinese authorities have moved to curb and unwind overseas investments by homegrown dealmakers including HNA, Anbang Insurance Group, and Dalian Wanda Group. At least one common thread in those companies’ deals has emerged: Each company found itself sitting across from Blackstone at the negotiating table, often more than once, as it executed its global spending spree.

Although it may be more commonly thought of as a private equity firm, Blackstone has $120 billion in real estate assets under management. Jon Gray, Schwarzman’s second in command and designated successor, rose within the company by building up that business. As a seller, Blackstone spent much of the past few years feeding a hunger from Chinese buyers that proved insatiable— until now.