It is impossible to predict with any certainty, because last year Blackstone acquired data center REIT QTS Realty, and in 2018 it acquired hospitality REIT LaSalle Hotel Properties. Please. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. July 16, 2021. The real estate group of Blackstone, Blackstone Real Estate, is our sponsor and an affiliate of BX REIT Advisors L.L.C. Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Focusing on the common shares, BREIT has a total of 112,104 holders across the 4 types of class shares as of March 17, 2021. Disclosure: I/we have a beneficial long position in the shares of CORE PORTFOLIO + RETIREMENT PORTFOLIO + INTERNATIONAL PORTFOLIO either through stock ownership, options, or other derivatives. It invests in real estate properties across 8 sectors and real estate debt through mortgage-backed securities and other real estate-related loans. He added that the REIT had ample cash reserves to "weather pretty much any storm." Digging into Blackstone's latest real estate deal, 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 latter deal included . With the help of BX REIT Advisors LLC, their investment strategy is to invest in stabilized and diverse real estate portfolios to provide income to their investors. Their strongest market comes from the West and Southern states. *Average returns of all recommendations since inception. Nonetheless, they fueled investor concerns about the future of the REIT, which makes up about 17% of Blackstone's earnings. The stockholder distribution across the class shares is shown below. Blackstone continues making major deals across the multifamily sector by planning to acquire Bluerock Residential Growth REIT in an all-cash . 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. Private equity giant Blackstone Group plans to purchase 66 residential complexes in San Diego County for more than $1 billion in one of the biggest real estate transactions in local history. 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. Driving those returns was the company's thematic investment approach, currently focused on rental housing and industrial real estate in the Southern and Western parts of the country. BREIT has the authority to issue a total of 10,100,000,000 shares. The distribution of these capital shares is specified below. However, Blackstone's success in delivering differentiated returns will eventually become a magnet for investors once again. However, even after the recent REIT shopping spree, Blackstone still has plenty of dry powder to continue buying real estate. Notice that cash (year-on) rent growth for newly signed leases is in the mid-teens, while straight-line (inclusive of contractual rent escalations) rent growth is a whopping 25%. 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. So far, its highest total net distribution (includes deductions of corresponding fees already) was Class I shares in FY 2019. Is this happening to you frequently? If you have an ad-blocker enabled you may be blocked from proceeding. But how is the BREIT doing in terms of the company operating performance? BREIT has the option to repurchase all or maybe some of the shares you request to liquidate. Learn More. . Herbert Smith Freehills, JLL and Cushman & Wakefield advised on the sale. Join us for a 2-week free trial and get access to all my highest conviction investment ideas. Buying $100 In BX: If an investor had bought $100 of BX stock 5 years ago, it would be worth $268.05 today based on a price of . NAV REITs work differently from traditional publicly-traded REITs. It has a strong balance sheet with mostly fixed-rate debt. That was four times more than the company's redemption limit, forcing it to restrict redemptions once again. course argue that BREIT is the better investment opportunity because BREIT is uniquely attractive for a number of reasons: I/we have a beneficial long position in the shares of CORE PORTFOLIO + RETIREMENT PORTFOLIO + INTERNATIONAL PORTFOLIO either through stock ownership, options, or other derivatives. I'll do that again for you. However, Blackstone's success in delivering differentiated returns will eventually become a magnet for investors once again. That suggests it could make more headline-grabbing deals this year. Liz Brumer-Smith (Blackstone): Blackstone is one of the leading alternative asset-management companies in the world. It gets paid a 1.25% of the NAV each year as well as 12.5% of the annual total return subject to a 5% hurdle. 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. That's a 39% premium to its stock price on Feb. 9, when news broke that . . But I think that public REITs are today far more opportunistic than BREIT. In the . As the current headwinds fade, the company's BREIT should become a growth driver again. Simply Self Storage, East Coast Storage Portfolio, Cactus Storage Portfolio, etc. Deutsche Bank analyst Carlo Santarelli was sufficiently impressed with the fourth-quarter numbers from two casino-oriented real estate investment trusts (REITs) that he reiterated "Buy" ratings on each. A disadvantage of non-traded REITs is the higher management fees as compared to traded REITs. Aside from contributing to the overall returns, real estate debt investments also provide added liquidity especially for cash management in the Companys share repurchase plans. 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. Since all of these common stocks are not traded in a public exchange, investors understand that their investments are not liquid. Just because something isn't quoted does not mean that it isn't correlated or volatile. 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. Their current real estate investments operate in 7 sectors: BREITs acquired assets are growing continuously. Their corporate headquarters is located at 345 Park Avenue, New York. The Vanguard Group, Inc. is currently the company's largest shareholder with 9.3% of shares outstanding. 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. The company will likely continue to battle this headwind until it works through its current backlog. Since inception date to July 31, 2021, total returns (without initial sales charge fees) were between 10% 11% across all types of share classes. PS Business Parks owns a 27 million square foot portfolio of industrial, business park, traditional office, and multifamily properties located primarily in California, Miami, Texas, and . 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. BREIT, the non-traded real . DISCLAIMER: Jussi Askola is not a Registered Investment Advisor or Financial Planner. 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 . This button displays the currently selected search type. The general trend of NAV prices for all class shares was increasing until a sudden drop occurred in the first quarter of 2020 during the onset of the COVID-19 pandemic. The REIT is marketed to wealthy individual investors. Source: BREIT Fact Card (as of July 2021). To give you an example, at High Yield Landlord, we hold an international Portfolio with REITs from 6 different countries. Blackstone Inc (BX.N) limited withdrawals from its $69 billion unlisted real estate income trust (REIT) on Thursday after a surge in redemption requests, an unprecedented blow to a franchise that . Class S and T shares dont include the upfront 3.5% sales charge at initial subscription yet. Public Storage expects to recognize a $2.3 billion after-tax gain, which it intends to distribute to its shareholders. High Yield Landlord is managed by Leonberg Capital. Dollar Tree Inc forecast annual profit well below estimates on Wednesday, hurt by elevated freight and investment costs and as consumers rein back spending on discretionary items. Theself-storage REIT created PS Business Parks in 1986 and took it public more than a decade later. Last but not least, since REITs are today priced at large discounts to fair value, they also pay a higher yield and offer a lot greater upside potential. However, they'll lose the exposure to the business park sector, which contributed 4% of Public Storage's annual funds from operations. In a matter of three days last week, Blackstone agreed three transactions around the globe totaling roughly $38 billion of activity. Clearly, as the Vanguard Real Estate Index (VNQ) has sold off along with the broader market this year, Blackstone believes that there is ample value to be found in REITs. Many non-traded REITs suspended their repurchase programs during the early days of the pandemic. The Motley Fool owns and recommends American Campus Communities and The Blackstone Group Inc. However, they also have non-U.S. investments, particularly in Europe, to a small extent (by about 1%). Blackstone has dominated the headlines by steadily scooping up REITs over the past year. The asset manager is buying so aggressively because REIT valuations are significantly below the private market valuations of their real estate. It is heavily invested in rapidly growing sunbelt markets. We take a look at two attractive REITs trading significantly below their net asset values. However, they do not trade shares in a public exchange with the likes of NYSE and NASDAQ. Those sectors are benefiting from long-term tailwinds and inflation. These deals showcase its growing, dominance in the commercial real estate sector, However, even after the recent REIT shopping spree, Blackstone still has plenty of dry powder to continue buying real estate. Blackstone Inc. agreed to buy student-housing owner American Campus Communities Inc. in a deal valuing the company at about $12.8 billion, including debt, a bet that rents will continue to rise as . Its president Jonathan Gray was elevated and made successor to Chief Executive Stephen Schwarzman as a result of his success in property investing. Consider These Alternative Real Estate Investments. 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. 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%. [added emphasis]. More investors are entrusting it with more of their capital, giving it the funds to acquire more real estate. 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 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. Blackstone Group has been on an aggressive REIT buying spree in the last few years. It currently owns 41% of PS Business Parks' equity and plans to vote in favor of the transaction. 22/06/2021. The chart below shows the YTD performance of all class share classes, plus the since inception date returns. Cuando se ampla, se proporciona una lista de opciones de bsqueda para que los resultados coincidan con la seleccin actual. Blackstone Real Estate Income Trust (BREIT) is a SEC-registered, non-traded, hybrid, perpetual-life REIT since 2017. Bellagio (NV), MGM Grand (NV), & Mandalay Bay (NV). Blackstone Inc. is an American alternative investment management company based in New York City.Blackstone's private equity business has been one of the largest investors in leveraged buyouts in the last three decades, while its real estate business has actively acquired commercial real estate. Looking for more investing ideas like this one? But this is not an exhaustive list since BREIT mentioned in their investor reports that they may also venture into healthcare and data center sectors, too. The deal values the, One interesting aspect of this deal is that it will provide an unexpected windfall to shareholders of. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Please. This means that there is an external asset manager, in this case, Blackstone, that takes care of the management in exchange for fees. Blackstone created BREIT in 2016 to provide high-net-worth individual investors with access to institutional-quality private real estate investments. 3 Beaten-Down Dividend Stocks to Buy Without Hesitation, My Top 3 Dividend Stocks to Buy Today (and It's Not Even Close), 2 FAANG Stocks Billionaires Are Selling in Droves and 1 They Can't Stop Buying, 3 Stocks That Could Join Apple, Microsoft, and Alphabet in the $1 Trillion Club, 1 Bargain-Basement Warren Buffett Stock Down 78% to Buy Before It Starts Soaring, 2 Growth Stocks That Can Turn $250,000 Into $1 Million by 2030, According to Bloomberg, investors requested to pull more than $5 billion out of, Blackstone created BREIT in 2016 to provide high-net-worth individual investors with access to institutional-quality private real estate investments. ("Net asset value" is akin to an adjusted book value for REITs using estimated market values for their real estate. On Blackstone's third-quarter earnings call in October, Gray blamed REIT redemptions on market volatility, which he said had driven away individual investors from active equity and fixed income funds. Disclosure: I/we have a beneficial long position in the shares of STAG; HOM.U either through stock ownership, options, or other derivatives. Blackstone Stock Keeps Soaring Higher. SoCal Grocery Portfolio, Canarsie Plaza (NY), Bakers Center (PA), etc. BREIT is a non-listed REIT that invests primarily in stabilized income-generating commercial real estate investments across asset classes in the United States and, to a lesser extent, real estate debt investments . That has put STAG at a 30% discount to NAV, one of the steepest discounts in its history as a public REIT. Blackstone Mortgage Trust, Inc. has a 12 month low of $20.87 and a 12 month high of $32.90. They earn income by leasing out rental spaces to clients. In July, we saw another example of this accretive capital recycling as STAG sold two properties for $82 million at a 5.2% cap rate after having purchased them several years prior at an average cap rate of 6.2%. Some investors are seeking liquidity to cover losses incurred elsewhere. DLF holds bulk of its rental assets (offices and . EmeryTech Office (CA) & Coleman Highline Office. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. That, for us at High Yield Landlord, is not enough on its own. "The impact on Blackstone depends on whether the REIT is able to stabilize its net asset value over time, or is forced to enter an extended run-off scenario, with significant asset sales and ongoing redemption backlog too early to tell, in our view," BMO Capital Markets analysts wrote in a note. Does the Stock Market Have You Down? The national CBD office market vacancy rate increased by 0.1 percentage point from 8.3 per cent to 8.4 per cent in three months ending March 31. The company sees a massive untapped opportunity for high-net-worth investors since they have a low percentage of their portfolios currently allocated to alternatives. Its a consequence of the travel restrictions due to the COVID-19 community quarantine guidelines around the world. Tombol ini menampilkan jenis pencarian yang dipilih saat ini. Blackstone (BX.N) limited withdrawals from its $69 billion unlisted REIT on Thursday after redemption requests hit pre-set limits . "Our business is built on performance, not fund flows, and performance is rock solid," the spokesperson said. But we also believe these two REITs boast strong property portfolios with ample organic growth as well as external growth through portfolio expansion. I am not receiving compensation for it (other than from Seeking Alpha). 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