Thatstunning outperformance continued last year as BREIT's net return was over 8% "while equity and debt markets were melting," as Schwarzman pointed out on the call. Cost basis and return based on previous market day close. Investment advisors assess the shares and report them in terms of fair value, like how mutual funds work. As of June 30, 2021, their total properties were 1,463. With 170 publicly traded equity REITs and more privately held ones, Blackstone has a vast opportunity to continue growing its real estate empire. Global investment firm Blackstone-sponsored Nexus Select Trust has filed the draft paper with market regulator Sebi to launch India's first public issue of retail REIT to raise around US$ 500 million (about Rs 4,000 crore), sources said. The unconsolidated investments come from their joint venture with MGM Growth Properties LLC, wherein BREIT owns 49.9% of interest. BREIT outsources third-party pricing service providers to determine the fair value for these debt investments. Blackstone has agreed to pay $187.50 per share in cash for PS Business Parks, a roughly 15% premium to its average share price over the last two months. The total revenue coming from rental income also seems to increase consistently. The asset management behemoth boasts roughly $50 billion in dry powder capital earmarked for global real estate, including a new real estate fund with over $24 billion in commitments from investors so far. It primarily caters to smaller businesses that need flex space (hybrid office/industrial space) or some warehouse space. But what about today? And management is also skilled and motivated, as insiders own around 40% of the company. They and other analysts said Blackstone's REIT runs the risk of getting caught in a spiral of selling assets to meet redemptions if it cannot regain the trust of its investors. To give you an example, at High Yield Landlord, we hold an international Portfolio with REITs from 6 different countries. The U.S. real estate investment trust, or REIT, sector was hit abnormally hard during the 2022 bear market. Total returns could be higher if you account for the accumulated share distributions throughout your investment years. They've . As an equity REIT, they have a diverse coverage of real estate investments. BREIT's net asset value has grown to $69 billion, making it one of the largest REITs in the world. The Motley Fool has a disclosure policy. The surge in redemptions at BREIT continues to get a lot of attention. Blackstone Inc. will purchase PS Business Parks, Inc. (NYSE:PSB) in an all-cash deal valued at approximately $7.6 billion, the two companies announced April 25. Join us for a 2-week free trial and get access to all my highest conviction investment ideas. Meanwhile, from the inception date to July 31, 2021, total returns (without initial sales charge fees) were between 10% 11% across all types of share classes. Though the dividend yield of ~3.2% may seem low, it is actually quite high compared to the yields of its closest peers in the Sunbelt multifamily space: With over 30% upside to fair value, it would not be surprising if Blackstone at least made an attempt to buy BSR. Become a Passive Landlord with our 8% Yielding Real Estate Portfolio. Shares of BXMT opened at $21.31 on Tuesday. As of July 2021, BREIT has a total of 1,508 real estate properties in the residential, industrial, net lease, self-storage, hotel/hospitality, retail, and office sectors located across the U.S. BREITs occupancy rates are all above 90% for almost all sectors, with the exemption of the hotels/hospitality sector which was heavily affected by the COVID-19 pandemic. The REIT's quarterly dividend of ~$0.13 (paid monthly in $0.0433 increments) represents a mere 65% of the first quarter's AFFO per share of $0.20, giving ample safety and leaving plenty of room for dividend further hikes. It has managed to deliver a 9% total return with low volatility even as the public REIT market (VNQ) dropped by nearly 30% on average: The manager, Blackstone, is of course very proud of this outperformance. Today, he is the author of "High Yield Landlord - the #1 ranked real estate service on Seeking Alpha. More investors are entrusting it with more of their capital, giving it the funds to acquire more real estate. Westfield tower at 100 Market Street, SydneyCredit:Peter Rae. There are literally no signs of a slowdown yet for STAG's industrial real estate, and yet the market has punished STAG with a ~35% selloff this year. I wrote this article myself, and it expresses my own opinions. That was almost 70% of all the capital raised by non-traded REITs that year. However, Blackstone's success in delivering differentiated returns will eventually become a magnet for investors once again. "Our business is built on performance, not fund flows, and performance is rock solid," the spokesperson said. If investors want to buy BREIT shares, they must have: BREIT has 4 types of share classes which differ in how the investors will be charged. Despite the COVID-19 pandemic, BREIT achieved a 6.1% net return in 2020 for the Class S shares which has the most number of stockholders among its common shares. These cash reserves totaled $2.7 billion as of the end of October, according to its prospectus. We do not believe it is a good idea to buy a REIT simply because it looks like an attractive buyout prospect for big-money asset managers and private real estate funds. As of FY 2020, each common stock class received a gross distribution of $0.6354 per share. Blackstone has reported a 9.3% year-to-date return for its REIT, net of fees, a contrast to the publicly traded Dow Jones U.S. While a cheaper fair value is good news for new investors. As of July 2021, BREIT has a total of 1,508 real estate properties in the . [added emphasis]. Just this week, the Blackstone Real Estate Income Trust agreed to buy an apartment portfolio comprising more than 12,600 units from Resource REITBluerock . While they will be a headwind for Blackstone's growth in the near term as the company works through its backlog, they aren't due to any issues with that investment vehicle. Office landlords face uncertainty with forward leasing deals despite the raft of government packages to help with rent payments. The latter deal included . By. So far in 2022, Blackstone has bought or agreed to buy: Preferred Apartment . Jussi Askola is a former private equity real estate investor with experience working for a +$250 million investment firm in Dallas, Texas; and performing property acquisition in Germany. BREITs common stocks are priced at their fair value in terms of NAV net asset value. LONDON (Reuters) -While there has been little wider fallout from this week's surge in redemption requests at an unlisted Blackstone real estate income trust (REIT), it is being read by some as a warning sign. "These all will continue put pressure on Blackstone's premium valuation," they wrote. DISCLAIMER: Jussi Askola is not a Registered Investment Advisor or Financial Planner. And our opportunistic funds protected capital, down only 1%, so we only performed by 16% for our customers over the index. Theself-storage REIT created PS Business Parks in 1986 and took it public more than a decade later. Jussi is also the President of Leonberg Capital - a value-oriented investment boutique specializing in mispriced real estate securities often trading at high discounts to NAV and excessive yields. But I think that public REITs are today far more opportunistic than BREIT. HPA has a portfolio of over 17,000 homes throughout the U.S. Florence Chong speaks to Anil Reddy You need to be a registered user to read this content All quotes delayed a minimum of 15 minutes. Blackstone is a premier global investment manager. Like Salesforce.com, inc. (NYSE:CRM), Roblox Corporation (NYSE:RBLX), and Advanced Micro Devices, Inc. (NASDAQ:AMD), HubSpot, Inc. (NYSE:HUBS) is a stock that many elite hedge funds have been . Blackstone Group(BX 0.97%) is back in the headlines again this week with another multi-billion-dollar purchase of a real estate investment trust (REIT). When expanded it provides a list of search options that will switch the search inputs to match the current selection. BREIT has delivered differentiated returns for its investors since its formation. Este botn muestra el tipo de bsqueda seleccionado. They have outperformed the MSCI U.S. REIT Index which generated only -7.6%. Resource REIT (non-traded) for $3.7 billion. Blackstone continues making major deals across the multifamily sector by planning to acquire Bluerock Residential Growth REIT in an all-cash . The $71 billion Blackstone Real Estate Income Trust (BRET) saw investor withdrawals of nearly $9.9 billion last year. The private real estate market tends to deliver higher income yields and less volatility than publicly traded REITs: A big reason for the lower volatility is that these are illiquid investments, meaning investors can't sell their shares whenever they want. LONDON, Dec 2 (Reuters) - While there has been little wider fallout from this week's surge in redemption requests at an unlisted Blackstone real estate income trust (REIT), it is being read by some as a warning sign. You are responsible for your own investment decisions. Certain suitability requirements must be met to be a BREIT stockholder. And apparently this is the new target. Source: BREIT Fact Card (as of July 2021). And others could be selling at what they believe is a near-term peak in pricing for private real estate values, which have yet to see the same pricing correction as publicly traded REITs. In 2021, BREIT raised nearly $25 billion from investors. Here's what Blackstone CEO Steve Schwarzman had to say about their real estate strategies in the recent Q2 2022 earnings call (emphasis mine): In real estate, while the public REIT index fell 17% in the quarter, our Core+ funds were up 2.3%. Do your own research or seek the advice of a qualified professional. Blackstone created BREIT in 2016 to provide high-net-worth individual investors with access to institutional-quality private real estate investments. Using different valuation methods, real estate services firm Jones Lang LaSalle (JLL) recently posited that REITs' discount to NAV is over 15%, commenting that a "sustained dislocation in public and private values could be a precursor of opportunities for fundamentals driven private market participants, leading to take-private M&A.". Like the BPP funds, BREIT doesn't buy fixer-uppers. Blackstone Real Estate Income Trust, Inc. (BREIT) has real estate investments in diverse sectors such as residential, industrial, office, storage, and hotel/hospitality. The REIT turmoil is a setback for two of Blackstone's strategies that helped it become the world's biggest alternative asset manager with $951 billion in assets: real estate investing and attracting high net-worth individuals. They always want to grow because it maximizes the fees that they own. But it is hard to ignore the huge disparity in valuations between BREIT and Public REITs in today's market. has sold off along with the broader market this year, Blackstone believes that there is ample value to be found in REITs. Those sectors are benefiting from long-term tailwinds and inflation. I think that it is inferior and yet it is a lot more expensive. In fact, Blackstone is close to finalizing what could be the biggest traditional private-equity real estate investment fund in history, according to the Wall Street Journal. This button displays the currently selected search type. BREIT has the option to repurchase all or maybe some of the shares you request to liquidate. The 2 main distinctions of REITs in terms of how they earn income are equity and mortgage REITs. Blackstone (BX.N) limited withdrawals from its $69 billion unlisted REIT on Thursday after redemption requests hit pre-set limits . It still has a lot of dry powder after its latest deal, suggesting its shopping REIT shopping spree could continue. The curbs came because redemptions hit pre-set limits, rather than Blackstone setting the limits on the day. Rising interest rates weigh on real estate values because they make financing properties more expensive. Learn More. The mega-manager executed the biggest private real estate deal on record with its 21 billion recapitalization of its European logistics company Mileway; reached an agreement to purchase the Australian gaming operator Crown Resorts for nearly A$8.9 billion ($6. As of March 17, 2021, it has a total of 112,104 stockholders. 22/06/2021. Blackstone is also active in credit, infrastructure, hedge funds, insurance, secondaries, and growth . Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Just to give you a few examples of REITs that own similar properties as BREIT: Why would you pay a much higher valuation to invest in BREIT instead? As a result, it will receive about $2.7 billion in cash when the deal closes. Associate Director at Atlantic Group. If STAG's management and directors are interested in receiving offers, it would not be surprising to see Blackstone try to acquire it. Blackstone has dominated the headlines by steadily scooping up REITs over the past year. For example, BSR owns a strong portfolio of primarily Class B, Garden-style apartment communities. Instead, the sell-off in its stock stemming from BREIT looks like a great buying opportunity for long-term investors to add to their position. Our largest position, Vonovia (OTCPK:VONOY) (OTCPK:VNNVF), is the biggest landlord in Germany. BREIT, the non-traded real . 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