The Blackstone rise up: how one nation took on the world’s largest industrial landlord | Personal fairness

The Blackstone rise up: how one nation took on the world’s largest industrial landlord | Personal fairness

Blackstone is the most important industrial landlord in historical past. Over the previous 20 years,

Blackstone is the most important industrial landlord in historical past. Over the previous 20 years, it has quietly taken management of condominium blocks, care houses, pupil housing, railway arches, movie studios, places of work, lodges, logistics warehouses and datacentres. Blackstone doesn’t simply personal actual property, it owns all the pieces – or that’s the way it can really feel whenever you begin to look at its bewildering array of belongings. In the event you put on Spanx, have ever matched with somebody on Bumble, stayed in a Hilton lodge or a CentreParcs resort, visited Legoland, Madame Tussauds, the London Dungeon or an aged relative at a Southern Cross care dwelling, you will have encountered an organization that varieties, or has just lately fashioned, a part of the Blackstone empire.

The New York headquarters of Blackstone are situated in a skyscraper on Park Avenue. Each Monday, the agency’s founder Steve Schwarzman and chief working officer Jon Grey collect with senior companions round a big convention desk on the thirty first flooring to debate funding memos despatched the earlier week by groups within the firm’s 26 places of work within the US, Europe and Asia. It’s right here that Blackstone’s funding choices are made. Final 12 months, the corporate invested $270bn, bringing the overall worth of the belongings it manages to $881bn, barely greater than the gross home product of Switzerland, and greater than twice that of Denmark. The Monday assembly resembles an intense seminar whose individuals zero in on the weaknesses in proposals that go earlier than them. Some investments can return to this desk three or 4 occasions for approval earlier than they’re in the end killed.

Blackstone is an asset supervisor, a kind of personal monetary agency that invests the wealth of pension funds and insurance coverage corporations. It isn’t to be confused with BlackRock, an asset administration agency based by Larry Fink, who labored for Blackstone within the Nineteen Eighties and arrange its bond-investment enterprise. In 1994, BlackRock grew to become an unbiased agency and Blackstone offered its shares within the firm. Fink and Schwarzman now work on reverse sides of Park Avenue. Fink’s firm dwarfs Blackstone, however in the case of property, Blackstone is the enormous. Its $320bn actual property portfolio is greater than six occasions bigger than that of BlackRock. “For Blackstone, actual property is the goose that lays the golden egg,” Brett Christophers, a professor of geography and creator of a forthcoming guide in regards to the asset administration trade, informed me.

Within the 2000s, Blackstone’s actual property division was identified for purchasing up workplace areas and lodges. Now, it appears to choose life-science laboratories and warehouses rented out to last-mile supply corporations. However it’s Blackstone’s curiosity in one other sort of actual property that has attracted probably the most scrutiny. Lately, it has turn into identified for making a worthwhile asset class from residential properties – in different phrases, shopping for up houses. In contrast to warehouses or workplace blocks, the principal income supply in rental houses are the individuals who stay in them. Though Blackstone insists that its prime precedence is offering a great service, the finance trade’s expectation of accelerating returns can appear at odds with the pursuits of tenants.

Within the years earlier than the pandemic, the corporate introduced its “conviction themes” – the areas the place it plans to speculate – to its largest shareholders at an annual investor assembly. (This occasion was held on the Waldorf Astoria lodge in Manhattan, which Blackstone used to personal.) “It was like consuming from a firehose on this planet of actual property,” Anil Khera, a former managing director at Blackstone in London, informed me of 1 assembly on the Waldorf. “You could possibly be speaking about purchasing centres in Shanghai one minute, places of work in Seattle the following minute. In that room, you’d in all probability be extra knowledgeable about what was taking place on this planet of actual property than in another room on the planet.”

When Blackstone buys a constructing – say, an workplace block in London – workers are dispatched to “stroll the asset”, contemplating its measurement and site, ceiling top, air flow, pure gentle, transport hyperlinks, the variety of lunch spots close by, what number of college students, creatives and pc programmers are transferring to the realm and what different companies are situated there. After workers have visited the location and combed by its paperwork, they collect with colleagues from the agency’s American, European and Asian places of work to evaluate and “socialise” the proposed deal. The ultimate step is to safe approval from the true property funding committee at its Monday assembly. For main acquisitions, senior leaders will fly in from New York to stroll the house if they don’t seem to be but satisfied by its industrial enchantment.

This methodical, even cautious, method to investing has yielded large rewards. At the moment, the identify of Blackstone’s founder could be seen on universities and public establishments throughout the US. There’s a Stephen Schwarzman constructing on the New York Public Library, a Schwarzman centre at Yale College and the Schwarzman School of Computing in Massachusetts. Quickly, the College of Oxford will open the Schwarzman Centre for the Humanities, funded by the most important single donation it has ever obtained. But, past the inscription of its founder’s identify into buildings and brass plaques, Blackstone is shaping the cities round us in a extra profound manner.

The Blackstone rise up: how one nation took on the world’s largest industrial landlord | Personal fairness
Blackstone founder Steve Schwarzman in 2019. {Photograph}: Gary He/Reuters

The corporate has acquired homes and flats at a voracious velocity in cities around the globe. Like every firm, Blackstone is targeted on creating returns for its buyers. Residents in some Blackstone properties have accused it of elevating rents whereas decreasing overheads, and the corporate has even been blamed – by an adviser to the United Nations – of serving to to gasoline the worldwide housing disaster. (Blackstone vehemently denies these accusations and has beforehand mentioned that the UN adviser’s findings included “quite a few false claims, vital factual errors and inaccurate conclusions”.)

In most locations the place it started to purchase up residential properties, Blackstone confronted little opposition from governments or politicians. That’s, till it arrived in a small Scandinavian nation, which, when confronted with the detached drive of this international actual property firm, determined Blackstone had gone too far. “Blackstone was like a boxer strolling right into a heavy right-hand hook to the jaw,” Curt Liliegreen, a Danish housing economist, informed me. “They didn’t see it coming. They picked completely the fallacious place.”


Blackstone began making main investments in houses shortly after the 2008 monetary disaster, when tantalising new alternatives emerged. A budget credit score that rolled internationally within the years earlier than the monetary disaster had allowed folks to momentarily stay out a dream. Within the US, they purchased sprawling homes that they may not afford as soon as the carousel stopped. In Spain, the place Blackstone would additionally set its sights, your entire nation obtained drunk on the GDP development that flowed from its bloated building sector. In each locations, an actual property bubble was sustained by nothing greater than an expectation that property costs would proceed to rise. Once they began to fall, the outcomes had been catastrophic. However not for Blackstone.

Earlier than 2008, main actual property buyers had centered on the locations the place folks labored or shopped. After the monetary disaster, the trade began eyeing up the locations the place folks lived. Within the US, as an increasing number of folks discovered themselves unable to pay their mortgages, hundreds of homes grew to become out there at discounted costs. In spring 2012, Blackstone dispatched workers to vacuum up such properties. It based a subsidiary, Invitation Houses, to handle its new kingdom of homes, which spanned from Seattle to Atlanta.

“We had been very specific in regards to the belongings we had been shopping for,” Alexandra Thur, a former fairness associate who joined Invitation Houses earlier than the corporate even had a reputation or e-mail handle, informed me. The agency appeared for two- or three-bedroom homes in sunnier climes the place an financial restoration appeared extra probably. It prevented struggling cities resembling Detroit or Cleveland. Invitation Houses employed native brokers who knew each element in regards to the neighbourhood, proper down as to if a avenue had a “bizarre church” or a rundown purchasing parade on it, Thur recalled. Quickly, the corporate was spending as a lot as $125m on homes each week.

Not everybody was thrilled with their new landlord. Some individuals who lived in Invitation Houses’ properties informed journalists that it had hiked rents, appeared to scrimp on upkeep prices and imposed punitive charges on tenants. The corporate’s enterprise mannequin appeared to depend upon maximising hire and charges whereas decreasing the price of upkeep. On this dispassionate equation, tenants gave the impression to be those who misplaced out. Some complained of black widow spider infestations, floods of uncooked sewage and plumbing leaks. Regardless of this, the federal authorities gave Blackstone’s enterprise mannequin a seal of approval. In 2017, Fannie Mae, a government-sponsored mortgage lender, even acted because the guarantor for a $1bn mortgage made to Invitation Houses.

Blackstone informed me any unfavorable reviews had been a “mischaracterization of the information”. The corporate had beforehand responded to reviews of tenants’ complaints by noting that it spent a mean of $25,000 renovating every dwelling, that it was serving to handle a nationwide scarcity of rental lodging, and that it scored extremely in tenant satisfaction surveys. It additionally mentioned that Invitation Houses solely owned 0.1% of single-family houses throughout the US. Even so, the corporate was the most important proprietor of household rental houses within the nation. Earlier than Blackstone offered its shares in 2019, Invitation Houses owned about 82,500 houses.

Jonathan D Gray, now president and COO of Blackstone, in 2015.
Jonathan D Grey, now president and COO of Blackstone, in 2015. {Photograph}: Mary Altaffer/AP

On the identical time it was shopping for up properties throughout the US, in 2013, Blackstone made its first funding in Spanish housing, shopping for 1,860 flats from the town of Madrid. The story was the identical as within the US: the Madrid tenants union accused Blackstone of climbing the hire on new leases, forcing some tenants to depart their houses. In line with a two-year evaluation of Blackstone-owned flats by lecturers in Madrid, tenants mentioned their buildings rapidly declined after Blackstone took over. (In an e-mail, a spokesperson for the corporate informed me that rising rents in Madrid had been attributable to an “imbalance between provide and demand”, and that Blackstone’s funds invested greater than €150m in refurbishing houses in Spain and offering companies to its tenants.) By 2019, Blackstone owned virtually 30,000 rental houses within the nation, making it Spain’s largest personal landlord.

Then, as if spinning a globe on a desk, the corporate mounted its consideration on a distinct a part of the continent. As an alternative of shopping for repossessed houses at fire-sale costs, Blackstone would begin to purchase housing in “tier-one” cities that had been dwelling to the “industries of the longer term”: science, tech and inventive fields. One of many individuals who labored on this technique was James Seppala, the corporate’s head of actual property in Europe. Seppala grew up in France, attended boarding college in England and studied French and Italian literature at Harvard. He additionally has household from Finland, and was significantly concerned about investing in Nordic nations.

Stockholm was the primary Scandinavian metropolis the place Blackstone made a serious funding in housing. With nationwide hire controls, Sweden was like no different market the corporate had entered. That may appear offputting for a landlord, however for Blackstone, it was a plus. “There’s something very protected and steady about investing in regulated markets, since you are inclined to have extra demand than you should have provide,” Seppala informed me after we spoke over Zoom. “From an investor’s perspective, that’s fairly a protected backdrop.”

In 2016, Blackstone purchased a controlling stake in Sweden’s largest actual property agency, which owned 16,000 flats, most of which had been in Stockholm. That 12 months, the corporate renovated greater than 1,000 flats after which raised the hire on them by 42%. Over the next three years, it purchased extra flats in Stockholm, and by 2019, it owned 21,000. Blackstone quickly got here below fireplace from the Swedish tenants union, and, in 2018 it modified the identify of its Swedish firm to Hembla, a pleasant, Swedish-sounding identify (“Hem” means “dwelling”). In a suburb to the north of the town, a form of pure experiment unfolded. Blackstone’s Swedish firm owned virtually half the flats on one housing property. The opposite half had been nonetheless owned by the native authority, which made it straightforward to check how the 2 landlords operated.

In a damning report compiled in the summertime of 2019, shortly earlier than Blackstone offered its stake within the firm, Sweden’s tenants union alleged that the entrances to the Hembla properties had been “messy”, “soiled” and “damaged”, with holes within the partitions and flaking paint. This degradation, the report concluded, was the results of these flats having been owned by personal landlords for nearly a decade, and Blackstone was merely the most recent firm to have acquired them. Blackstone mentioned it reinvested all earnings again into these properties from 2016-2019, and didn’t pay dividends to its shareholders over this era. The corporate informed me it invested in photo voltaic panels and geothermal heating on the properties, and created widespread areas and playgrounds. However even the playgrounds that belonged to those properties had been apparently worse off, the union concluded, illustrating its level with a tragic {photograph} of a damaged seesaw.

“Blackstone got here in, raised the hire, took the cash, and obtained the hell out of right here,” Ola Möller, a Social Democrat MP, mentioned. “We aren’t used to that in Sweden. We’re used to corporations like Volvo and Ikea!” By the point Blackstone offered its stake in Hembla in September 2019, Seppala and his European colleagues had already mounted their consideration on a distinct a part of the map. In neighbouring Denmark, the corporate had began working with a associate to purchase up flats. However Denmark would show a much more hostile nation to put money into.


In late 2018, Claus Højte’s inbox started to fill with agitated messages. Højte is the pinnacle of Copenhagen’s tenants union and he has lived within the metropolis for the reason that Nineteen Eighties, when he moved there as a pupil. Again then, he used to bathe at college as a result of there was no rest room in his small rented condominium. Now, he owns a spacious home within the suburbs, which he shares along with his spouse, who’s a college trainer, and his golden retriever, Lulu. He cycles to work, the place he and his 33 employees symbolize virtually 40,000 renters within the metropolis.

The entire emails Højte was receiving gave the impression to be about the identical factor. A brand new landlord had began shopping for up properties in Copenhagen, blitzing by the town at excessive velocity. Some tenants mentioned they’d arrive dwelling to seek out their condominium block wrapped in scaffolding and workmen traipsing up and down the steps. One tenant wrote to Højte that their new landlord had harassed her out with letters and “disagreeable measures”. One other mentioned that they had been despatched 5 reminders about late hire, regardless of having paid on time each month. The identical tenant complained in regards to the landlord’s “ice-cold communication”. Others believed the owner was sprucing up the buildings for a extra prosperous class of resident, making beauty enhancements to stairwells and facades. To some tenants, these renovations appeared as a lot about disrupting their lives as fixing something.

The brand new landlord was a small Danish agency referred to as 360 North. Behind its shopfront was an enormous. Blackstone had moved into Denmark, paying its working associate 360 North to purchase up condominium blocks on its behalf. For the tenants union, gaining an outline of precisely what number of flats Blackstone owned in Copenhagen was tough. When it purchased a constructing, it will arrange a person property firm, a “PropCo”. Every block of flats was owned by a distinct “PropCo”, which was in flip owned by a holding firm, a “HoldCo”, which was in flip owned by one other holding firm, a “TopCo”. And to make issues extra sophisticated, that TopCo was owned by one other holding firm, Calder Holdco, which was based mostly in Luxembourg. This construction is a trademark of the asset administration trade. “It is sort of a spider’s internet”, Claus Højte mentioned of his makes an attempt to seek out out which properties Blackstone in the end owned.

Copenhagen is a small metropolis the place outrage travels quick. Quickly, the media began to take an curiosity in tenants’ tales. One informed Danish TV that her condominium had been soaked in rainwater after workmen eliminated components of the roof, and one other mentioned cracks had began to look in her ceiling. A TV channel broadcast a documentary referred to as Metropolis of the Wealthy, which forged Blackstone as its villain. Folks suspected the motive behind the corporate’s disruptive renovations was to get tenants to depart so it may renovate their houses and cost new occupants larger hire. (Seppala informed me over Zoom that as the corporate was constructing its portfolio in Denmark, “it grew to become clear to us that we needed to make enhancements in how our native group in Copenhagen managed the properties”.)

Copenhagen looking towards Vesterbro area of the city.
Copenhagen trying in the direction of Vesterbro space of the town. {Photograph}: Nigel Howard/Alamy

360 North even supplied some residents sizeable sums to vacate their properties for good. As soon as the corporate had renovated an condominium for brand new tenants, it will generally double the hire. (Owing to a legislation launched within the 90s, landlords that make investments a certain quantity in renovating previous rent-controlled flats can elevate the hire when a brand new tenant strikes in, which means new tenants can find yourself paying near the market charge for such flats.)

Throughout Copenhagen, these techniques grew to become generally known as ryste bygningen – or “shake the constructing”. “Think about an apple tree shaking on the trunk to get the apples free from the branches,” wrote one journalist of 360 North’s partnership with Blackstone. “In the true property world, the occupants are the apples, the flats are the branches, and when a landlord ‘shakes the constructing’, it’s to get the tenants out.”

Nearly all over the place that tenants complained about Blackstone, the identical man would seem. He would circle the buildings, inspecting courtyards and stairwells and chivvying contractors. He appeared possessed of a churning vitality, as if he may hardly keep nonetheless for longer than a couple of minutes at a time. He wore thick black spectacles like a Nineteen Fifties crooner and spoke quick. “Blackstone didn’t appear to care what strategies he was utilizing, or what dangerous media protection he was getting,” mentioned Anette Birck, a tenant who lives in an condominium owned by the corporate. That man was Nils Jansson, and in Copenhagen, he can be Blackstone’s undoing.


Nils Jansson was an odd enterprise associate for a Wall Avenue agency that most popular to be considered a cautious steward of pension pots quite than an impulsive Monopoly man. Your entire inhabitants of Denmark is simply over half the dimensions of London, and its real-estate trade is dominated by a tight-knit group of pros with august credentials. Jansson was an outsider. He got here from Holbæk, a hefty harbour city, and studied farming at agricultural school within the early 2000s. He labored for a catering firm after which as a supervisor in a building agency, discovering himself in Copenhagen throughout the largest monetary growth of the twenty first century. Jansson had a hustling, enthusiastic vitality, which earned him the nickname “Speedy”. “Within the olden days,” mentioned one property investor who used to work with him, “we used to say he may allure a cow out of a flower area.”

Actual property finance could be sophisticated. What Jansson did was easy. Earlier than the monetary disaster, he purchased properties from a gaggle of buyers who offered buildings to at least one one other at vastly inflated costs. Jansson would purchase rundown buildings – “some previous crap” as he as soon as put it – then renovate them and promote them on. Eik Financial institution, a Faroese financial institution with branches in Denmark, gave Jansson enormous loans to purchase properties on the idea it will obtain a bonus as soon as they had been offered. This was authorized however extraordinarily dangerous. The mortgage trusted the worth of properties persevering with to rise, whereas the bonus was a seductive promise that gave bankers an incentive to miss danger.

Jansson grew to become an enormous buyer at Eik Financial institution. When the true property market slowed down in 2009 and the banks stopped lending him cash, Jansson went bankrupt. One 12 months later, Eik financial institution declared insolvency and was taken over by the state. After the crash, Jansson principally disappeared from public view. He moved on to a farm and purchased a herd of cattle. He informed a journalist that he spent most of his time digging ditches and had no plans to ever begin buying and selling actual property once more. Amongst those that had adopted the story, “Speedy” was emblematic of the dangers and excesses that had precipitated Denmark’s monetary disaster. In 2012, a Danish newspaper ran a profile of him headlined The person who offered canine shit.

Nils Jansson in 2018.
Nils Jansson in 2018. {Photograph}: Søren Bidstrup/Ritzau Scanpix

Blackstone’s resolution to associate with Jansson was like Lloyds of London transferring to the US and deciding to enter enterprise with a bankrupt farmer. “Typically, initially, after we begin making investments in a sure location, we’ll depend on third events as companions as a result of they might produce other shoppers, too,” Seppala mentioned. Jansson had expertise that Blackstone wanted. For one, it was in search of previous properties that might be renovated. Few knew the market higher than Jansson. He was unrelenting, with a desire for working 18-hour days. But in a rustic the place folks have a deep aversion to anybody who seems to be getting too large for his or her boots, Jansson made enemies wherever he went. “I may bear in mind his face from the monetary disaster. I used to be like, what’s he doing right here?” mentioned one resident in a housing improvement that Jansson visited when making an attempt to purchase it on Blackstone’s behalf.

Blackstone was not the one investor to have purchased and renovated flats in Copenhagen with the purpose of elevating the hire. Nor was it the most important. Measured by the worth of its buildings in 2021, it got here twenty third on a listing of personal landlords in Copenhagen’s housing market. (PFA, Denmark’s largest industrial pension fund, took first place.) Though it elevated the hire on the flats it renovated, the quantity that individuals paid in previous flats was so low to start with that these new tenancies had been nonetheless cheaper than renting an equal flat in a brand new condominium block. (Owing to laws handed within the 90s to encourage new homebuilding, there are fewer laws governing rental houses constructed after 1992.)

Even so, Blackstone had two main issues. It was an American agency eroding the inventory of low-cost housing, and it had partnered with a businessman who hurtled by the town like obnoxious startup founder. Sure acquisitions grew to become significantly infamous. Holckenhus, a fin-de-siècle condominium block initially designed as low-cost housing for artists within the centre of city, was dubbed the “crown jewel” of Blackstone’s portfolio. Within the spring of 2019, workmen ripped out the constructing’s unique stained glass home windows and changed its gentle fittings, giving the impact of an inexpensive convention centre. (Blackstone mentioned it needed to substitute the home windows to enhance the sustainability of the constructing.) The corporate additionally utilized for planning permission to construct penthouse flats in artists’ attic studios; in Blackstone-speak, such conversions create “additionality”. (It later cancelled this plan.) In the meantime, at a block in Vesterbro, an prosperous space within the metropolis centre, a couple of resident mentioned that they had seen workmen employed by 360 North taking away belongings from their shared loft in sacks. In an e-mail to tenants, 360 North mentioned this stuff had been “misplaced”.

Banners at a housing estate in Frederiksberg, Copenhagen in August 2019, protesting against Blackstone’s attempts to buy the estate.
Banners at a housing property in Frederiksberg, Copenhagen in August 2019, protesting towards Blackstone’s makes an attempt to purchase the property. {Photograph}: Ole Ellekrog/Fagbladet Boligen

These disparate tales started to coalesce into a bigger battle. In Vesterbro, some tenants began a gaggle referred to as Cities for Residents. At an property in Frederiksberg, the place the corporate was making an attempt to purchase 300 flats, residents launched an lively marketing campaign and arrange a management room the place volunteers, who met on an virtually day by day foundation, painted banners shouting “Blackstone Go Dwelling”. After rifling by the nationwide archives in Copenhagen, one lawyer residing in Frederiksberg discovered an previous deed for the flats that had been made with a typewriter virtually 100 years earlier. It appeared to counsel that any future sale of the flats to a personal investor would breach the phrases of the deed.

It helped that some residents had been well-connected and knew how you can get journalists and politicians to hear. A number of of the folks residing in Holckenhus had been civil servants, artists and writers. Some co-wrote an op-ed for a serious Danish newspaper; others convened a gathering with a minister. The media ate up their tales, recognizing a handy narrative: a plucky social democracy versus an unrepentant American investor.

“What occurred within the Blackstone [case] was the center lessons found they had been at risk of not having the ability to home themselves,” Claus Højte informed me. “In Denmark, when one thing begins affecting the center lessons, one thing political occurs.”


On a cloudy night in April 2019, Højte referred to as a gathering on the tenants union. So many individuals turned up that it was standing-room solely. Kaare Dybvad, an MP for the Social Democrats, was there. So had been two different MPs, from the leftwing Enhedslisten social gathering and the far-right Danish Folks’s social gathering. Blackstone had turn into a goal that shifted relying in your politics. For the left, it was proof that vast buyers wanted reining in. For the precise, it was a international outsider that might be blamed for the shrinking inventory of reasonably priced houses in Copenhagen. The ambiance was tense. “Tenants had been speaking about hire will increase of as a lot as 250%,” Dybvad recalled. “They shared tales of building staff arriving at 6am within the morning and coming into their bedrooms with out discover.”

The target of the tenants union was not merely to create embarrassing publicity that might deter Blackstone. They wished to distil this anger into concrete coverage that might supply extra everlasting safety to renters. By the summer time of 2019, Blackstone had already stopped shopping for flats in Copenhagen, and in October, it cancelled its plans to purchase the 300 flats in Frederiksberg. Although Seppala denies that these choices had been a response to unfavorable media protection, its method to the Danish market gave the impression to be altering. Specifically, the agency centered on severing ties with Jansson. “Unwinding ourselves out of that state of affairs, let’s say … it was the one largest problem that our enterprise was going through on the time, by far,” Seppala informed me.

Blackstone purchased out 360 North in Might 2019. Later that 12 months it will set up a brand new board and alter the corporate’s identify to Kereby, which interprets as “caring metropolis”. (One tenant described this piece of harm management as a “joke”.) The corporate has launched a name centre and now runs yearly satisfaction surveys. Kereby’s CEO, Lars Pærregaard, mentioned it additionally usually organises tenant conferences. Jansson, in the meantime, has moved again to the countryside. He advises corporations coming into the Danish actual property market and owns an equine breeding enterprise, a kitchen cabinetry agency, and an organization that makes bespoke horseboxes. He declined to be interviewed on the document.

Vesterbro in Copenhagen.
Vesterbro in Copenhagen. {Photograph}: Nigel Howard/Alamy

Two months after the assembly on the tenants union, Denmark held a normal election. The Social Democrats received a majority in parliament and Dybvad was appointed housing minister. By autumn 2019, the backlash towards Blackstone had made all of it the best way to parliament. Mette Frederiksen, the brand new prime minister, attacked the corporate in a speech. “An American personal fairness fund is buying our homes,” she declared. “Does greed know no boundaries?” Dybvad spent that winter hammering out the small print of a plan for a brand new legislation that might cease Blackstone and different corporations from speculating on Danish housing. This is able to even be a chance to plot a high-profile coverage that might burnish his fame as an bold new minister.

He wished to introduce a brand new legislation that might forestall landlords from climbing the hire on flats they renovated till 10 years after that they had purchased them. It could cease not simply Blackstone, however each investor in Denmark from playing on Copenhagen’s previous properties. Unsurprisingly, Denmark’s landlords affiliation and pension funds had been livid on the proposal. Dybvad was a pragmatist; he knew he desperately wanted the assist of his opponents to have any probability of passing a invoice. So he shortened the rule to 5 years – lengthy sufficient to place the brakes on hypothesis and stop landlords from making fast income, however reasonable sufficient to appease rightwing members of parliament.

Lastly, in July 2020, the Danish parliament handed what grew to become informally generally known as the Blackstone Legislation, or Blackstone indgreb. “We had been holding our breath till the very second the legislation was handed and the ink was dry,” mentioned Anders Svendsen, a lawyer for Denmark’s nationwide tenants union. In addition to stopping new landlords from elevating the hire for 5 years, the laws additionally prohibits landlords from providing tenants cash to maneuver out. (They have to additionally improve a constructing’s vitality effectivity earlier than rising the hire.) The legislation targets all landlords, pension funds and massive buyers. Blackstone was simply the wedge that propped open the door. The tenants union even thought-about sending the corporate a bunch of flowers.


The Blackstone legislation is without doubt one of the few profitable instances of a rustic taking a stand towards the transformation of houses right into a useful resource for the finance trade. However there have been different makes an attempt to curb the trade’s encroachment. In Spain, the federal government has proposed a legislation that might ban the sale of social housing to funding funds and drive landlords to cap the hire in areas the place it has exceeded inflation. In Berlin, the place Blackstone owns 2,500 flats, the town launched a five-year hire freeze in January 2020, which lined 90% of Berlin’s flats. (Final 12 months, Germany’s highest courtroom dominated the cap was unconstitutional.) Extra just lately in Denmark, the place inflation is now operating at virtually 10%, the federal government has pledged to cap hire will increase to 4% over the following two years.

Regardless of these hiccups, Blackstone reveals no signal of slowing down. In 2009, shortly after the world entered a recession, Schwarzman wrote to his shareholders: “We’re long-term buyers and we’re affected person.” Again then, Blackstone had $27bn of unspent capital, identified within the trade as “dry powder”. At the moment, it’s sitting on $170bn, opening up prospects that Schwarzman may as soon as solely have dreamed of. The corporate likes to attend for the precise second to spend. As Schwarzman informed a monetary companies convention in 2010, in reference to funding alternatives in Europe: “We’re principally ready to see how crushed up folks’s psyches get, and the place they’re prepared to promote belongings.” Adapting a quote typically attributed to Lord Rothschild, he reminded his viewers that: “You need to wait till there’s actually blood within the streets.” At the beginning of 2022, as inflation has precipitated rents to swell, Blackstone reported its highest earnings on document.

Blackstone insists it doesn’t intentionally set excessive rents, however follows the market. The corporate says rents are rising due to an imbalance between provide and demand. “The straightforward truth is that housing prices are rising as a result of there’s a power scarcity of housing in lots of markets around the globe,” a spokesperson for the corporate informed me through e-mail.

Blackstone is now positioning itself as an answer to housing shortages in each the US and Britain. “We and our buyers are centered on contributing to creating much-needed new provide,” a spokesperson mentioned. In England, Sage Housing, an organization owned by Blackstone, final 12 months grew to become the UK’s largest single supplier of reasonably priced houses. (Reasonably priced, based on the UK authorities’s definition, means not more than 80% of market hire.)

One chilly morning earlier this 12 months, I met Dybvad in Frederiksberg on the property the place Blackstone pulled out of shopping for 300 flats in 2019. We walked by the sprawling group of low-rise cottages that had been constructed within the early twentieth century and modelled on English backyard villages. The property is verdant and peaceable, and every condominium has entry to a backyard for rising greens. “This is without doubt one of the few locations on this municipality the place you possibly can stay when you work in a kindergarten, or when you drive a bus,” mentioned Dybvad. For him, the struggle towards Blackstone was about making it attainable for such folks to stay in an in any other case costly metropolis.

Denmark can seem to be a postcard for social democracy, however its dedication to reasonably priced housing solely extends up to now. Whereas Dybvad was preventing to go the Blackstone legislation, his social gathering was additionally implementing a coverage that identifies estates with excessive crime, unemployment charges and a excessive proportion of “non-western” residents and earmarks them for eviction and demolition. These areas should slash their public housing inventory to not more than 40%. Already the coverage has resulted within the sale of 260 reasonably priced flats to a Danish actual property funding agency, NREP, one of many largest property house owners in Copenhagen. In contrast to the residential properties that Blackstone acquired, nonetheless, these had been in underprivileged areas, and such gross sales haven’t attracted the identical media backlash. Dybvad has since turn into the minister for integration, and is now chargeable for overseeing this coverage, which has been criticised for demonising migrant communities.

In Højte’s view, Blackstone’s presence in Denmark was merely a ripple on the floor. The even greater downside is the pension funds, which have lengthy been shopping for up housing not simply in Denmark, however internationally. Pension funds search long-term, predictable returns, so the five-year delay that the Blackstone legislation introduces is unlikely to discourage them from investing in Copenhagen’s flats. One nation’s pension supplier is one other nation’s monetary predator. Because the Blackstone legislation got here into drive, Danish pension funds have invested in residential actual property in Belgium, and in Berlin, the place one pension fund grew to become the goal of a marketing campaign launched by the town’s tenants’ affiliation. The cash that such corporations put money into housing ensures regular returns for buyers, nevertheless it additionally ensures that rents will enhance as these corporations attempt to squeeze a revenue. “So you need to select,” Højte mentioned: “Would you like larger pensions … or would you like housing for all?”

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