UPDATE 1-Blackstone raises $10.9 bln real estate fund

Tue Apr 1, 2008 3:29pm EDT

(Adds quote in paragraph 4, data on real estate in paragraph 5, details on real estate market in paragraph 6, information on last fund in paragraph 7, shares in paragraph 8, byline).

By Megan Davies

NEW YORK, April 1 (Reuters) - Private equity and real estate firm Blackstone Group (BX.N) said on Tuesday it raised $10.9 billion to invest in real estate, and said there should be attractive investment opportunities ahead.

Blackstone said it had raised a total of nine real estate funds with total capital commitments of $25.7 billion. The fund it just closed is called Blackstone Real Estate Partners VI.

Previous real estate investments Blackstone has made include Equity Office Properties (EOP) and Hilton Hotels Corp.

"Between raising or investing, raising is by far the more difficult task," said Michael Holland, chairman of private investment firm Holland & Co and a former partner at Blackstone. He said investors in the fund would have been attracted to Blackstone's track record. "They would be taking into account huge sales they've made -- such as EOP. Those look right now to be reasonably brilliant."

Blackstone reported in March that its assets under management rose 47 percent from the previous year to $102.43 billion, of which its real estate assets doubled to $26 billion.

Blackstone said that the new fund would allow it to enter new markets and expand globally.

The U.S. commercial real estate market is enduring a tough time. Analysts from JPMorgan Chase & Co recently predicted that the market could decline as much as 20 percent over the next five to eight years as tighter credit squeezes business property.

The last major fund Blackstone raised was a $21.7 billion private equity fund in August.

Blackstone's shares were up $1.16 or 7.3 percent to $17.04 on the New York Stock Exchange late in the trading session. (Reporting by Megan Davies, editing by Gerald E. McCormick)

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