blackstone reit purchase

In addition, they also invest in corporate bonds, term loans, mezzanine loans, and other real estate-related loans. The $71 billion Blackstone Real Estate Income Trust (BRET) saw investor withdrawals of nearly $9.9 billion last year. But it limits repurchases to 2% of its NAV per month and 5% of its NAV in a calendar quarter. With public REITs, you have much more flexibility. 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. For example, Blackstone provides the option to repurchase shares from investors once a month. Blackstone launched the REIT in 2017, piggybacking off the success of its real estate empire, which had by then outgrown its private equity business. This kind of discount would imply either that BSR's property portfolio is sub-par, that its management is unskilled or conflicted, or that its balance sheet is weak, none of which are the case. has sold off along with the broader market this year, Blackstone believes that there is ample value to be found in REITs. 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. BREIT is a REIT where shares are held by investors, but those shares aren't traded. While that could affect its growth in the near term, it remains confident in its long-term outlook. Nonetheless, they fueled investor concerns about the future of the REIT, which makes up about 17% of Blackstone's earnings. Blackstone Group (BX 1.37%) is back in the headlines again this week with another multi-billion-dollar purchase of a real estate investment trust (REIT). The transaction has been unanimously approved by the REIT's Board of Directors and represents a premium of 63 percent to the REIT's most recently published Net Asset Value of $9.06 per share . Both share classes can be bought through fee-based programs, registered investment advisors, institutional and fiduciary accounts. To make the world smarter, happier, and richer. As a result, the REIT allowed investors in November to redeem $1.3 billion, equivalent to approximately 43% of investors' repurchase requests. Excellent. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Since its inception, it has deployed over $83 billion to multifamily investors, oil and gas producers, hotel managers, retail stores, and enterprises for their property purchases. Blackstone's (BX) public non-listed REIT, BREIT, has been one of the best-performing REITs of this year. New York, June 22, 2021 - Blackstone Real Estate Income Trust, Inc. ("BREIT") announced today that it has entered into a definitive agreement to acquire Home Partners of America ("HPA"), valuing the company at $6.0 billion. ACC was the last public REIT dedicated to the sector to be taken private, following Campus Crest Communities' privatization by Harrison Street in 2015 and EdR by Greystar in 2018. Blackstone Real Estate Income Trust Inc., a publicly registered non-traded real estate investment trust sponsored by private equity giant Blackstone (NYSE: BX), has agreed to purchase American International Group Inc.'s (NYSE: AIG) interests in a U.S. affordable housing portfolio for approximately $5.1 billion, in an all-cash . While its recently announced deals will utilize some more of that capital, additional money is likely to continue flowing into its coffers. Their strongest market comes from the West and Southern states. The average annual cost of a public internally-managed REIT is around 0.6%, and some REITs like Realty Income (O) have it as low as 0.4%. However, it recovered by the end of 2020 and soared in the first half of 2021. 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. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. 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. Blackstone earns lucrative fees for managing BREIT and delivering on its return objectives for investors. For example, BSR owns a strong portfolio of primarily Class B, Garden-style apartment communities. He has authored award-winning academic papers on REIT investing, been featured on numerous financial media outlets, has over 50,000 followers on SeekingAlpha, and built relationships with many top REIT executives. I have no business relationship with any company whose stock is mentioned in this article. Blackstone managed a total of $236 billion of wealth held by individuals as of the end of September, up 43% year-on-year. Good examples include Global Net Lease (GNL) and Industrial Logistics Properties Trust (ILPT). BREIT is a Maryland corporation founded in 2015 and started operating as a non-traded REIT in 2017. Barclays analysts downgraded their rating of Blackstone's stock to "equal weight" from "overweight" and cut their price target to $90 from $98 on Friday. 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. The industry leader for online information for tax, accounting and finance professionals. For the first six months of the year, our real estate strategies appreciated 9% to 10% versus a 20% decline in the REIT index, equaling an outperformance of roughly 3,000 basis points. Hypothetically, if you invested 4 years ago in 2017, you can reap a return of between 24 to 25% on average for all share classes. You can buy or sell with minimal fees with just a few clicks of mouse. Nexus Select Trust has a portfolio of 17 operational shopping malls . Chicago-based Home Partners of America purchases, owns and operates single-family rent al homes across the United States. With 8.1% and 4.3% of the shares outstanding respectively, BlackRock, Inc. and Blackstone Inc. are the second and third largest shareholders. Since all of these common stocks are not traded in a public exchange, investors understand that their investments are not liquid. This button displays the currently selected search type. Since its inception in 2017, BREIT has consistently issued monthly distributions to its stockholders. The information in his articles and his comments on SeekingAlpha.com or elsewhere is provided for information purposes only. Per maggiori informazioni sulle modalit di utilizzo dei dati, consulta la nostra Informativa sulla privacy e lInformativa sui cookie. Public Storage expects to recognize a $2.3 billion after-tax gain, which it intends to distribute to its shareholders. EmeryTech Office (CA) & Coleman Highline Office. So far in 2022, Blackstone has bought or agreed to buy: Preferred Apartment . Because of those returns, Blackstone has become a victim of its own success as some investors seek to cash in on their profitable BREIT shares to deploy that capital into other investments. They explain on a conference call earlier this year that: "For the first six months of the year, our real estate strategies appreciated 9% to 10% versus a 20% decline in the REIT index, equaling an outperformance of roughly 3,000 basis points. BREITs common stocks are priced at their fair value in terms of NAV net asset value. DLF holds bulk of its rental assets (offices and . It is a lot cheaper and offers better upside potential going forward. Join us for a 2-week free trial and get access to all my highest conviction investment ideas. 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. Were working to restore it. A majority (by 89%) of BREITs income comes from rental revenues across a diverse set of asset classes much of it comes from residential and industrial sectors. This time it's buying PS Business Parks . To be fair, BREIT is a pretty vehicle and it has a strong track record. That suggests it could make more headline-grabbing deals this year. Invest better with The Motley Fool. Alex Snyder, a portfolio manager at CenterSquare Investment Management LLC in Philadelphia, said the arbitrage between the value Blackstone has assigned to its real estate portfolio and the value of publicly traded REITs caught the eye of investors. Such externally-managed REITs are typically hated in the public market because their management is expensive and they suffer much greater conflicts of interest. ET, 3 Dividend Stocks to Buy Before the Bear Market Ends. I have no business relationship with any company whose stock is mentioned in this article. Is this happening to you frequently? Blackstone is the 1000-pound gorilla in any real estate room. Blackstone is able to purchase giant holdings in a . Retention remains high, and rent growth for new and renewal leases is rising rapidly. The majority of investors redeeming were from Asia and needed the liquidity, they said. For a Limited-Time - You can join Seeking Alphas #1 community of real estate investors at the Lowest-Rate-Ever-Offered. Blackstone also said in the prospectus it had access to $9.3 billion in "immediate liquidity.". Hence, we find Blackstone's President & Chief Operating Officer Jon Gray concluding that: The best opportunities today are clearly in the public markets on the screen and that's where we're spending a lot of time. NAV REITs do away with daily price fluctuations, making them less volatile compared to traded REITs. Herbert Smith Freehills, JLL and Cushman & Wakefield advised on the sale. Image courtesy of Bluerock Residential Growth REIT. Managers of non-traded REITs often offer their investors limited liquidity. High Yield Landlord is managed by Leonberg Capital. These deals showcase its growingdominance in the commercial real estate sector. Making the world smarter, happier, and richer. In terms of the location of the target market, BREITs investment strategy is focused on the U.S. market. ET, This 4.5%-Yielding Dividend Stock Has $50 Billion to Continue its Real Estate Buying Binge, 1 Roaring Dividend Stock That's Leading the Market Recovery. So far in 2022, Blackstone has bought or agreed to buy: That is about $30 billion of real estate! Meanwhile, total debt to gross book value is a mere 35%, a marker of a strong balance sheet. This year, the company has set its sights particularly on acquisitions of real estate investment trusts ("REITs"). But that's not due to any issues with the REIT itself. That could affect its growth in the prospectus it had access to 9.3. Lot cheaper and offers better upside potential going forward more of that capital, additional money likely... $ 9.3 billion in `` immediate liquidity. `` data, news content. Going forward a Maryland corporation founded in 2015 and started operating as a non-traded REIT in 2017 information his. 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