Blackstone (BX), the world’s largest real estate investor, looks at technology as the most import theme today when making investments. This is according to Jon Gray, the private equity giant’s head of real estate.
“It’s interesting. You think about real estate you say, ‘Gosh, this is a pretty boring business. Technology — does it really matter?’ And I would say when we think about deploying capital technology is the lead theme that’s impacting our thought process today,” Gray told Yahoo Finance.
Technology has resulted in a major share-shift from land-based retail to online retail.
“If you think of how you’re buying things, you’re buying much more online. As a result, as that grows, people need things less in stores and more directly in warehouse space.”
In the last seven years, Blackstone has purchased over 400 million square feet of warehouses in the United States, Europe, Asia, and Brazil. The firm did so with the idea that the share-shift that’s going on is leading to more demand for warehouse space.
Another impact from technology is job creation and the force that has on the real estate market. That’s led to a boom in places like Seattle, Northern California, Los Angeles, Austin, lower Manhattan, Boston-Cambridge. In Europe, it’s impacting Stockholm, Amsterdam, London, Dublin, and Berlin.
“So, for us, we’re trying to anticipate where this technology is moving to and then deploy capital against it.”
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Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter: