"This debt relates to a small portion of the Sponda portfolio," Blackstone said in an emailed statement on Thursday.

"We are disappointed that the Servicer has not advanced our proposal," it added. Commercial mortgage-backed securities or CMBS are bonds backed by mortgages on commercial properties.

Shares of the private-equity firm fell 1.3% in early trading.

Blackstone offered to buy the Finnish real estate investment company for about 1.8 billion euros in 2017 to expand its real estate business in the Nordic region.

"The loan was affected by two-year Covid disruption, the war in Ukraine (the assets being in Finland) and wider market volatility," a person familiar with the matter told Reuters.

Blackstone limited withdrawals from its $69 billion unlisted real estate income trust (REIT) in December after a surge in redemption requests, an unprecedented blow to a franchise that helped it turn into an asset management behemoth.

($1 = 0.9440 euros)

(Reporting by Jaiveer Shekhawat and Mehnaz Yasmin in Bengaluru; Editing by Anil D'Silva)