Chairman of the Board, Global Head of BREDS & Senior MD, Blackstone
Search every verified Timothy Johnson interview, podcast appearance, and on-the-record quote — each transcript cross-checked by AI and human review to confirm speaker identity. In a 2015 appearance at the NYU Capital Markets conference, Timothy Johnson, then Managing Director and Head of U.S. Originations at Blackstone, discussed the firm's focus on transitional real estate lending. He stated that Blackstone had positioned itself to compete in balance sheet lending, where risk is retained on the book, rather than in the CMBS market. Johnson explained that the firm had avoided the CMBS origination business because it requires distribution capabilities that he said fit better in a bank than at Blackstone. Johnson noted that competition in transitional real estate lending had not increased dramatically, as Blackstone was primarily competing against banks whose book structures had remained stable. He attributed this partly to regulatory changes that, in his view, made it harder for banks to conduct such lending on their balance sheets, citing GE's exit from the business as an example. Johnson added that pricing for high-quality loans continued to tighten as banks sought safe investments, but he expressed confidence in Blackstone's ability to underwrite more complex transitional deals.
“We focus on transitional real estate which is not really financed via the CMBS market, so we've positioned ourselves to compete more in balance sheet lending where the risk is retained on book.”
“We've liked that business because CMBS moves really quickly, allocations go up and down internally to banks, and you're exposed to the volatility of the markets.”
“We haven't jumped into the CMBS origination business because you need distribution and all that stuff, which fits better in a bank than in a place like ours.”
“There's a limit to how much any one bank can really do in transitional real estate lending, and that's where we've made our business and grown it over the past handful of years.”
“We haven't seen a dramatic uptick in competition because we're competing mostly against banks, and their book structure has remained in place.”
“Pricing for really good high-quality, down-the-fairway stuff for banks continues to grind in, and I see that continuing because banks need to put up money in safe places.”
“For things that take a bit more thought, a little more transitional, we feel like we can underwrite that because it's what we like to own.”
“Regulatory changes make it harder to do that type of real estate lending on balance sheets, which is why you see companies like GE exit the business due to regulatory pressures.”
Timothy Johnson Managing Director and Head of U.S. Originations at Blackstone.
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