Hong Kong Property Losses Hit PE Funds After $17 Billion Rush

When Blackstone Inc. bet on Hong Kong’s commercial real estate sector in 2014, it bought a 20,000-square-foot retail space in the bustling Mong Kok district for HK$700 million ($90 million) to target mainland Chinese tourists seeking brand-name wear.

Today, the space that once housed Forever 21 is valued at less than half that amount and Blackstone is in talks with Taipei Fubon Commercial Bank Co. to renegotiate terms of a loan for the property, according to people familiar with the matter who asked not to be named discussing private information. The building’s high profile retail tenant has been replaced by ...