Blackstone real estate fund withdrawals : Blackstone has become the latest company to restrict redemptions from its nontraded real estate investment trust due to rising investor anxiety about the global economy.
During the month of November, BREIT, or Blackstone Real Estate Income Trust, permitted investors to pull out a total of $1.3 billion. In a note to investors on Thursday, the private REIT reportedly said that this amounted to roughly 43 percent of the redemption requests it had received. On September 30th, BREIT’s total assets amounted to roughly $145 billion.
Blackstone can limit redemption requests to avert a forced sale of its real estate interests if investors redeem more than 5% of their holdings in a quarter.
The decision comes as real estate investors fret about the future of the commercial property market in the face of rising interest rates and a slowing economy. Due to persistently strong inflation, the Federal Reserve has pushed interest rates to historic highs this year.
Blackstone has defended BREIT’s good performance and big investments in multifamily and industrial real estate, two of the industry’s strongest sectors for several years running, as a possible explanation for the surge in redemption requests from investors.
Blackstone said in an email to CoStar News, “Our business is built on performance, not capital flows, and performance is rock strong.” Since its founding over six years ago, BREIT has provided exceptional returns to its investors. The company is also well positioned for the future thanks to its focus on rental housing and logistics in the Sun Belt and its long-term fixed rate debt structure.
Blackstone real estate fund withdrawals
Blackstone’s $69bn real estate fund for affluent individuals said Thursday it will limit redemption requests.
Blackstone Real Estate Income Trust claimed requests topped 2% of NAV monthly and 5% quarterly. New York’s Blackstone lost 9.6% to $82.76.
Breit plans to fulfill 2% of NAV monthly repurchase requests in the first quarter of 2023, subject to a 5% quarterly maximum. Blackstone’s real estate fund is under strain as interest rates climb and investor enthusiasm cools. Breit said it may limit or suspend repurchase requests. A large portion of redemptions this year have come from Asia, a source claimed, citing private information.
BREIT outflow bear case is playing out, affecting shares this morning, and we expect it to remain an overhang in coming quarters, analyst Michael Brown said Thursday. Retail expansion has been a key source of BX’s performance in recent years, and retail growth concerns could weigh on BX’s valuation.
Effects of Blackstone real estate fund withdrawals on Investors
In response to a recent influx of redemption requests, Blackstone and Starwood funds have instituted withdrawal limits.
The newest indication that the rise in interest rates poses a threat to disrupt the commercial property market is the line of investors waiting to withdraw money from real estate funds.
Blackstone Inc. announced last week that it would restrict investor withdrawals from its $69 billion flagship real estate fund due to an increase in redemption requests. A source close to the situation has revealed that not long after, Starwood Capital Group informed investors that it was similarly limiting withdrawals from a $14.6 billion fund.
Nontraded real estate investment trusts (like Blackstone and Starwood) are common among the wealthy because of their tax advantages and liquidity.
According to the firms, similar measures have been taken by other private real estate funds in the United Kingdom targeting institutions, such as BlackRock Inc. and CBRE Investment Management. Advisors to significant investors in the United States suggest that pension funds in the country are also beginning to withdraw money from real estate funds.
Increasing numbers of investors and financial institutions are abandoning the real estate market, which may explain why there has been an uptick in cash-out demands. Property values in this debt-ridden sector could fall if interest rates continue to rise. Meanwhile, fears about weak demand for office space and decreasing rent increases in the residential sector have been rising. Growth in the retail channel has been crucial to BX’s success in recent years, and the difficulties the business is having with this segment’s expansion could continue to weigh on the stock price.
Blackstone real estate income trust contact number
The main office of Blackstone Real Estate Income Trust is located at 345 Park Avenue, New York, NY 10154. How do I get in touch with Blackstone Real Estate Income Trust? The best way to contact Blackstone Real Estate Income Trust is by dialing (312) 466-3400.
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