The world’s largest alternative asset manager is having its artificial intelligence cake — and now it’s starting to eat it, too.
Blackstone Global Head of Real Estate Nadeem Meghji, whose company has invested billions developing data centers to support the AI revolution, said his firm is implementing it in everyday company operations, allowing it to leverage insights from the biggest commercial real estate portfolio on earth.
Bisnow/Chloe Gallivan
Blackstone’s Nadeem Meghji and 13th Floor Investments’ Arnaud Karsenti at the University of Miami’s Real Estate Impact Conference
“We’re starting to play with some basic tools, because all of our data is in one place,” Meghji said at the University of Miami’s Real Estate Impact Conference on Friday. “[I’ll] ask basically our proprietary version of ChatGPT, ‘How are we doing today on this warehouse that I just drove by in terms of its rents, occupancy, cash flow versus what we underwrote or assumed three years ago?’”
“You get an answer that is very thoughtful,” he added.
Meghji, who spoke to a ballroom full of hundreds of students and South Florida commercial real estate professionals, described an experiment his team ran on a hotel investment. They uploaded up to 400 pages of appraisals and documents for the piece of land and asked for input in terms of cost for the building. After that, they called local developers and brokers to test the information, he said.
“It’s almost all there,” Meghji said. “And after, like, an hour, then they are able to — because now the AI is getting integrated into various applications — ask ChatGPT to create an Excel model that would basically model development using those assumptions.”
Blackstone, which has more than $1T of assets under management, is the “biggest owner and developer of what’s happening with artificial intelligence,” said Meghji, who spoke onstage with Arnaud Karsenti, managing principal of Miami developer 13th Floor Investments.
Blackstone has $140B in data centers globally, with a similar amount of potential for development, Meghji said.
The firm purchased one of the most prolific data center developers, QTS Realty Trust, in 2021 for $10B. Since then, QTS has expanded significantly and has been a major source of returns for the Wall Street stalwart. Last year, it refinanced 10 QTS data centers with a $3.5B CMBS loan and two more with a $1.5B CMBS loan.
It is also reportedly aiming to launch its own public company to acquire already built and leased AI data centers
“It’s a really global business for us in strategy, and we think we’re still in the early innings of that build-out and couldn’t be more excited about the opportunity ahead there,” Meghji said.
Even as he was reiterating his conviction in AI, he acknowledged there is still concern about the risks it poses to job growth.
An estimated 60% of current jobs will require significant adaptation due to AI, and the global workforce is expected to fundamentally change by 2050, according to PwC, McKinsey and the World Economic Forum.
At the same time, AI has prompted skittishness among Wall Street investors wary of its potential to disrupt a variety of industries, from software companies to real estate brokerages and office landlords. Meghji said he thinks real estate investment is insulated from the fears of AI transformation, which has led to more conviction in real estate from investors.
“With all of the news about software disruption, a lot of our investors actually increasing [and] making real estate more compelling as an asset class, in more respect, because it’s viewed as hard assets,” Meghji said. “They’re tangible.”
