BREIT has the authority to issue a total of 10,100,000,000 shares. And they both have solid balance sheets that are not flashing any warning signals. Blackstone Real Estate Income Trust (BREIT) is a SEC-registered, non-traded, hybrid, perpetual-life REIT since 2017. 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 . For FY 2020, Class I shares were still the highest ($0.6354/share) in terms of total net distributions, followed closely by Class D ($0.608/share). BREIT also has real estate debt investments through securities and loans backed by the U.S. market. Mortgage REITs . Those returns will eventually draw more investors to BREIT. It is a lot cheaper and offers better upside potential going forward. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Nexus Select Trust has a portfolio of 17 operational shopping malls . They always want to grow because it maximizes the fees that they own. 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. BREIT is a hybrid REIT because it deals with both. This was followed close behind by Class I shares at $12.9/share. Blackstone has outperformed the market over the past 15 years by 5.0% annually. All of these are made possible through sponsorship from the Real Estate Group of The Blackstone Group, Inc. with decades of real estate experience. We are the fastest-growing and best-rated stock-picking service on Seeking Alpha with 2,500+ members on board and a perfect 5/5 rating from 500+ reviews: You won't be charged a penny during the free trial, so you have nothing to lose and everything to gain. And Blackstone's financial capacity to continue scooping up undervalued REITs is massive. Having invested in data centres in the US and Europe, Blackstone has eyes on Asia-Pacific - starting with India. Cushman & Wakefield chief executive James Patterson said uncertainty around the length and extent of the COVID-19 pandemic was leading to delayed investment decisions. I don't know many asset classes that perform -- outperform indexes by 3,000 basis points. 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. Blackstone's purchase of American Campus makes student housing a fully privately held asset class in the US. Since its inception in 2017, BREIT has consistently issued monthly distributions to its stockholders. Notes: Class D shares dont include the upfront 1.5% sales charge at initial subscription yet. Their debt portfolio has embedded leverage which may come from reverse repurchase agreements/derivatives, securities lending arrangements, total return swaps, and credit default swaps. Blackstone Inc 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 helped it turn into an asset management behemoth. The unconsolidated investments come from their joint venture with MGM Growth Properties LLC, wherein BREIT owns 49.9% of interest. It still has a lot of dry powder after its latest deal, suggesting its shopping REIT shopping spree could continue. 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. According to Bloomberg, that continued in January with over $5 billion in requests. Blackstone limited withdrawals from its $69 billion unlisted REIT on Thursday after redemption requests hit pre-set limits amid investor concerns it was slow to adjust valuations as interest rates . The stock has a fifty day moving average price of $22.70 and a 200 day moving average price of $24.69. ", stunning outperformance continued last year. Total returns account for all paid distributions plus the change in NAV price as capital gains. With dividends reinvested, the benchmark SPDR S&P 500 ETF (ticker: SPY) lost 18.2% last . But the better way to gauge a REITs performance is through its FFO. SoCal Grocery Portfolio, Canarsie Plaza (NY), Bakers Center (PA), etc. Goldman Sachs mulls deal options after consumer flop, TotalEnergies buys CEPSAs upstream assets in Abu Dhabi, Reporting by Chibuike Oguh and Herb Lash in New York As of June 30, 2021, their total properties were 1,463. Public Storage expects to recognize a $2.3 billion after-tax gain, which it intends to distribute to its shareholders. Clearly, the company will buy whatever it views as the most attractive viable deal. 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). Does the Stock Market Have You Down? Last week, it reached a $12.8 billion deal to acquire student housing-focusedresidential REITAmerican Campus Communities. Published - Tuesday, 20 Dec, 2022. For FY 2020, Class I shares were still the highest ($0.6354/share) in terms of total net distributions, followed closely by Class D ($0.608/share). As of their Q2 2021 report, total real estate debt investments have a fair value of $5.7B with a weighted average coupon of 5% and a weighted average maturity date of July 5, 2025. 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. The figure above shows the historical NAV price of the 4 types of class shares. I am not receiving compensation for it (other than from Seeking Alpha). Source: BREIT Fact Card (as of July 2021). That was . They claim that, unlike public REITs, BREIT is uncorrelated with the public stock market because it is a non-listed real estate investment vehicle. 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. 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. A disadvantage of non-traded REITs is the higher management fees as compared to traded REITs. This is surely a huge factor in the discount at which BSR typically trades. Just a month after, it grew to 1,508 properties. Although Santarelli kept his price target for Gaming & Leisure Properties Inc. at $60 per share, he bumped his . It has a strong balance sheet with mostly fixed-rate debt. Since all of these common stocks are not traded in a public exchange, investors understand that their investments are not liquid. Cap rates have expanded a bit, but so has the property NOI in most cases. Link REIT owns and operates shopping centres, retail spaces and offices and is the largest REIT in Asia in terms of market capitalisation. Like the BPP funds, BREIT doesn't buy fixer-uppers. In a matter of three days last week, Blackstone agreed three transactions around the globe totaling roughly $38 billion of activity. The information in his articles and his comments on SeekingAlpha.com or elsewhere is provided for information purposes only. It is today priced at just 35 cents on the dollar due to the war in Ukraine and we think that it is very opportunistic. The deal values theindustrial REITat $7.6 billion. This means that there is an external asset manager, in this case, Blackstone, that takes care of the management in exchange for fees. As the current headwinds fade, the company's BREIT should become a growth driver again. BREIT outperformed the MSCI U.S. REIT Index net return in 2020 (-7.6%) with a 6.1% net return of Class S shares which has the most number of stockholders among its common shares. As a result, it will receive about $2.7 billion in cash when the deal closes. Blackstone shares ended down 7.1% on the news on . Multifamily REIT Preferred Apartment Communities announced . Managing more than $975 billion, the company invests money for wealthy . It results in significant economies of scale and better aligns interests with shareholders because they earn salaries based on their performance and not just the mere size of the company. It primarily caters to smaller businesses that need flex space (hybrid office/industrial space) or some warehouse space. July 16, 2021. The curbs came because redemptions hit pre-set limits, rather than Blackstone setting the limits on the day. Certain parameters from financial statements will tell you how the company managed its investments through the ups and downs of the business cycle. If you can't get your money back, does the "paper valuation" then have any meaning? And apparently this is the new target. Disclosure: I/we have a beneficial long position in the shares of STAG; HOM.U either through stock ownership, options, or other derivatives. "It's not a surprise that you would see a deceleration in flows from individual investors when you've had this kind of market decline," Gray said. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. We have over 500 five-star reviews from happy members who are already profiting from our real estate strategies. 2021 YTD returns were the highest because BREIT has recovered well from the effects of the COVID-19 pandemic. 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 . The Vanguard Group, Inc. is currently the company's largest shareholder with 9.3% of shares outstanding. Blackstone claims that its REIT is superior to others. Blackstone Inc on Monday agreed to buy real estate investment trust (REIT) PS Business Parks for $7.6 billion, including debt, as dealmaking activity in the real estate sector continues to thrive . Good examples include Global Net Lease (GNL) and Industrial Logistics Properties Trust (ILPT). 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. Matthew DiLallo owns Public Storage. A higher fair value is good news for investors who are nearing the end of their investment term. Currently, Blackstone has a market capitalization of $66.78 billion. Despite the pandemic, they acquired worth $10.5B of real estate properties in the multifamily, industrial, and net lease sectors in 2020. Join us for a 2-week free trial and get access to all my highest conviction investment ideas. We spend 1000s of hours and over $100,000 per year researching the market for the most profitable investment opportunities and share the results with you at a tiny fraction of the cost. 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. This time it's buyingPS Business Parks(PSB) for $7.6 billion. Even if you expected its property values to drop a bit, its share price could still double before reaching its net asset value. Per maggiori informazioni sulle modalit di utilizzo dei dati, consulta la nostra Informativa sulla privacy e lInformativa sui cookie. Blackstone has earned a reputation for being one of the top real estate investors in the world. 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%. In the first quarter, same-community net operating income surged 16.3% year-over-year on the back of rent growth for new leases of 17.4% and renewals of 9.0%. Though Blackstone sometimes acquires individual real estate properties, such as The Bellagio in Las Vegas, it more often seeks opportunities to scoop up whole portfolios that will move the needle. To be fair, BREIT is a pretty vehicle and it has a strong track record. If I owned BREIT, I would try to get out of it to invest in public REITs instead. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. This is to avoid market volatility especially with factors that do not directly relate to real estate. BREITs real estate investment portfolio can be categorized into two real estate investments and real estate debt investments. Real estate major DLF has no plans to launch public offer of REIT in the next one year to monetise its rent-yielding commercial properties, its CEO Ashok Tyagi said. In a regulatory filing last month, Blackstone said that it has secured $24.1 billion of commitments for its latest real estate fund called Blackstone Real Estate Partners X. It leads to "growth at all costs", which hurts returns, and this is why such externally-managed REITs are disliked by investors. Our largest position, Vonovia (OTCPK:VONOY) (OTCPK:VNNVF), is the biggest landlord in Germany. Puoi cambiare le tue preferenze in qualunque momento nella sezione Le tue impostazioni per la privacy. Blackstone of course wants you to invest in BREIT because they earn fees for managing it. 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. I wrote this article myself, and it expresses my own opinions. They've . Is this happening to you frequently? While it has steadily put that money to work, cash continues flowing into BREIT's coffers because of its growing reputation for delivering top-tier returns. In addition, it had commitments to deploy another $9.4 billion across its public U.S. REIT privatizations and a deal to buy an Australian casino operator. Blackstone CEO Steve Schwarzman noted on the company's recent, that "BREIT has delivered 12.5% net returns annually since inception six years ago for its largest share class, earning over three times the public REIT index. Become a Passive Landlord with our 8% Yielding Real Estate Portfolio. Blackstone Real Estate Income Trust, Inc. (BREIT) has real estate investments in diverse sectors such as residential, industrial, office, storage, and hotel/hospitality. You can incur capital losses too depending on the share price it was repurchased. Yahoo fa parte della famiglia di brand di Yahoo. Florence Chong speaks to Anil Reddy You need to be a registered user to read this content NAV REITs do away with daily price fluctuations, making them less volatile compared to traded REITs. Were working to restore it. I wrote this article myself, and it expresses my own opinions. 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? Many non-traded REITs suspended their repurchase programs during the early days of the pandemic. Blackstone President Jon Gray received $479.2 million as income in 2022. Theself-storage REIT created PS Business Parks in 1986 and took it public more than a decade later. While this differential in performance between publicly traded and privately held real estate is interesting and good for Blackstone, it also signals opportunity for the average REIT investor. Blackstone Group has been on an aggressive REIT buying spree in the last few years. Investors reportedly asked to pull more than $5 billion out of its non-traded REIT last month. Click here to learn more!. 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. The residential rental market is another. Blackstone earns lucrative fees for managing BREIT and delivering on its return objectives for investors. But I think that public REITs are today far more opportunistic than BREIT. I don't know many asset classes that perform -- outperform indexes by 3,000 basis points." Pandemic was leading to delayed investment decisions $ 12.8 billion deal to student. In 2017, BREIT has recovered well from the effects of the top real Income! Jon Gray received $ 479.2 million as Income in 2022 discount at BSR., BREIT is a SEC-registered, non-traded, hybrid, perpetual-life REIT 2017! Estate portfolio managing BREIT and delivering on its return objectives for investors to blackstone reit purchase a REITs performance through. 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