With $684 billion worth of assets, The Blackstone Group is one of the largest alternative asset managers in the world. And after nearly 10 years at the company, Katie Keenan says her career path—including her recent promotion to CEO of Blackstone Mortgage Trust, Inc. (NYSE: BXMT)—has been a product of the firm’s unique culture.
Blackstone Mortgage Trust, which operates as part of the market-leading Blackstone Real Estate platform, originates high-quality first mortgage loans across sectors and markets to drive reliable, steady income for its shareholders.
Keenan noted that the strength and resilience of its model has proven itself throughout the pandemic as well as for the many years before, with excellent credit performance and strong current yield that has become increasingly attractive relative to compressing returns elsewhere in the market.
This year, Blackstone Mortgage Trust has capitalized on the re-emergence of transaction flow to drive significant activity in multifamily, life sciences, industrial, and growth market office lending, leading to strong growth for the business, which just crossed $20bn in portfolio size.
Blackstone Mortgage Trust has an apprenticeship culture that had Keenan coming up through the business sourcing, underwriting and negotiating many of those loans. Throughout her career, she drew on the tremendous information flow and experience within the platform to hone her own investment skills and develop them amongst the broader team. That inclusive culture is something Keenan is intent on preserving as CEO.
“I’m focused on making sure that we have the highest quality talent from all different backgrounds here,” she said.
Blackstone Mortgage Trust’s business model focuses on making low-leverage first mortgage loans to institutional sponsors. Keenan added that as “thematic investors,” the company also looks at macroeconomic growth drivers to make investment strategy decisions, including increasing activity in the multifamily and life sciences sectors.
Keenan says she’s excited to continue sharing the story of Blackstone Mortgage Trust’s “compelling business model” with the commercial real estate industry. She recently spoke with REIT magazine about Blackstone Mortgage Trust’s investment approach, why maintaining relationships in the real estate industry is key, and her side job tending to her vegetable garden.
What was the overall appeal of joining a company like Blackstone?
The culture here is unparalleled, so when I had the opportunity to join almost 10 years ago, I was really excited. The level of energy, the intellectual curiosity, and the care that everyone brings to the process—the investment decisions, the collaboration—all of that is inspiring and motivating. It’s a very unique environment to be a part of and a wonderful place to build a career.
The other thing that was really appealing to me is our apprenticeship culture. From the outset, I participated in all the conversations and was a key contributor to the decision-making process. The opportunity to be involved from the day I joined the company and to be able to evolve over time was invaluable. That’s something that is really special about Blackstone and its people, culture, process, and how we make investments. And it ensures we have the best talent on our team to generate top quality lending opportunities for the Blackstone Mortgage Trust portfolio.
As the pandemic evolves, how has a positive culture impacted your employees?
Our priority for the past year and a half has been ensuring the health and safety of our employees. It has been a challenging period, but it is really heartening to see how much the culture and support network that we built over the years leading up to the pandemic created this infrastructure where we operate as one team and support one another. There is a built-in level of communication and trust that has allowed us to deal with a very difficult situation.
How does being a part of the broader Blackstone umbrella benefit Blackstone Mortgage Trust?
We have a unique vantage point to access different types of investment opportunities, asset classes, markets, types of investing, and the ability to find relative value. We invest across the real estate business within the Blackstone platform—on the private side, in public investments, in securities, and in acquisitions on the equity side. Seeing that range of investment opportunities helps you become a better investor in every way. The breadth of Blackstone and all the different areas in which it invests provides us a unique perspective on trends and opportunities in the market that we would not see otherwise, and allows us to be nimble and decisive to capture the best loans available in the market.
How does Blackstone Mortgage Trust operate on a day-to-day basis?
Blackstone Mortgage Trust is focused on making high-quality first mortgage loans to institutional sponsors on real estate with solid fundamentals. Where we sit within Blackstone, we have the tremendous benefit of all the information we’re seeing across the business. We run as part of a highly integrated platform, so we have the information and the scale of the entire firm which drives differentiated access to investment opportunities and supports strong relationships throughout the industry. Having all those data points helps drive better decision-making.
Across the real estate platform, we have over $200 billion of capital under management, so we’re very significant owners in every asset class that we find interesting. This gives us deep, real-time information about fundamentals and capital markets. Our culture is very focused on sharing this information constantly, and this is really the bedrock for all of our investment decisions. So when we’re investing out of Blackstone Mortgage Trust in first mortgage investments, that process is supported by a tremendous network of information flow from across Blackstone Real Estate and the broader firm.
What is Blackstone Mortgage Trust’s investment approach?
At Blackstone, we’re thematic investors. We focus on what we see as the macro key growth drivers in the economy, and we use that to inform our different investment strategies within the firm. For example, we’ve been investing in life sciences and content creation for some time, and that translates through to the Blackstone Mortgage Trust portfolio where we’ve done a lot of lending on Boston lab buildings, as well as on studios and creative office space in Los Angeles. We’ve seen the strength and resilience in garden-style multifamily across the country, and it is our most active sector for new loans today. We’re regularly looking to bring the overall macro trends that we observe to lending opportunities that are experiencing tailwinds across the market.
Another key differentiating factor for our business is the size of Blackstone Mortgage Trust. Our scale gives us the unique access to a high-quality pipeline of investment opportunities. In any given quarter, 75% to 80% of our business is with strong sponsors who are repeat borrowers. We understand what’s important to these sponsors, they’ve had great experiences with us over the years, and we can draw on the depth of our relationships to capitalize on the best lending opportunities for the Blackstone Mortgage Trust business.
