The Motley Fool has a disclosure policy. That's a 39% premium to its stock price on Feb. 9, when news broke that . The asset manager partners with big money players like pension funds and insurance companies to provide strong returns and steady income. But I think that public REITs are today far more opportunistic than BREIT. Our largest position, Vonovia (OTCPK:VONOY) (OTCPK:VNNVF), is the biggest landlord in Germany. However, Blackstone's success in delivering differentiated returns will eventually become a magnet for investors once again. These properties are overwhelmingly concentrated in Texas, especially Austin, Dallas/Fort Worth, and Houston. It has a strong balance sheet with mostly fixed-rate debt. And our opportunistic funds protected capital, down only 1%, so we only performed by 16% for our customers over the index. Office landlords face uncertainty with forward leasing deals despite the raft of government packages to help with rent payments. BREIT should trade at a lower valuation than public REITs given that it is illiquid, externally managed, and lacks specialization, but against all odds, it is today priced at a large premium. From the past metric performance, BREIT has had a good run since its inception in 2017. 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. Invest at least 75% of total assets in real estate or cash. 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. Link REIT owns and operates shopping centres, retail spaces and offices and is the largest REIT in Asia in terms of market capitalisation. Overall, BREIT is one of the leading players in the NAV REIT market industry. To make the world smarter, happier, and richer. If you want full access to our Portfolio and all our current Top Picks, feel free to join us for a 2-week free trial at High Yield Investor. Do your own research or seek the advice of a qualified professional. However, he said there were no signs of panic selling as a result of vendor distress "which is encouraging". There is no upper limit on the size of this new fund, so it could potentially grow significantly larger. 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. 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. US private equity giant Blackstone Group has defied market jitters and pulled off a mega sale of an office tower above the Westfield mall in Sydney's CBD to Hong Kong-based Link REIT for $683 million. Schwarzman took home more than $1.27 . Price as of February 28, 2023, 4:00 p.m. The residential rental market is another. A real estate private equity firm with over 20 years of successful performance, are currently looking to add a Property Accountant to their team. 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. This was followed by the Class I shares, Class D shares, and then the Class T shares. As stable becomes sexy in Asia's real estate markets, Blackstone is teaming up with the family controlling the sponsor of a Singapore-listed REIT for a S$700.3 million ($524.5 million) offer to buy out the industrial real estate trust. Therefore, I continue to accumulate real estate through the public market. ET, 3 Dividend Stocks to Buy Before the Bear Market Ends. Is It a Buy Right Now? As a result, the REIT allowed investors in November to redeem $1.3 billion, equivalent to approximately 43% of investors' repurchase requests. BREIT issues consistent monthly distributions since its inception. 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. Information regarding Blackstone and Blackstone Real Estate is included to provide information regarding the experience of our sponsor and its affiliates. 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. Invest better with The Motley Fool. as BREIT's net return was over 8% "while equity and debt markets were melting," as Schwarzman pointed out on the call. Consider These Alternative Real Estate Investments. The Vanguard Group, Inc. is currently the company's largest shareholder with 9.3% of shares outstanding. 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 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 . I have no business relationship with any company whose stock is mentioned in this article. 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. Blackstone Mortgage Trust, Inc. has a 12 month low of $20.87 and a 12 month high of $32.90. 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. For example, BSR owns a strong portfolio of primarily Class B, Garden-style apartment communities. But it is hard to ignore the huge disparity in valuations between BREIT and Public REITs in today's market. 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. JOIN THE CONVERSATION. Get them exclusively at High Yield Landlord. 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. And management is also skilled and motivated, as insiders own around 40% of the company. Invest better with The Motley Fool. I wrote this article myself, and it expresses my own opinions. . Instead of daily price fluctuations, NAV REITs have a much less volatile movement. The stockholder distribution across the class shares is shown below. Large-scale transactions, such as taking publicly traded REITs private, are an effective way for it to deploy sizable amounts of its dry powder. However, net losses have been incurred since 2017 which can be attributed to the real estate debt portfolio. As a result, it will receive about $2.7 billion in cash when the deal closes. BREIT also has real estate debt investments through securities and loans backed by the U.S. market. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. BREITs occupancy rates are all above 90% for almost all sectors, with the exemption of the hotels/hospitality sector. 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. Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. This covers BREITs direct property investments, equity in public and private real estate-related companies, and unconsolidated investments. The distribution of these capital shares is specified below. For a Limited-Time - You can join Seeking Alphas #1 community of real estate investors at the Lowest-Rate-Ever-Offered. Let's take a look at two potential buyout targets for Blackstone in these property sectors. . Before that, it struck agreements to acquire three apartment REITs for a combined $13.1 billion, an industrial REIT for $3.1 billion, and a data center REIT for $10 billion. Please be aware of the risks associated with these stocks. Blackstone has outperformed the market over the past 15 years by 5.0% annually. [added emphasis]. 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 2 main distinctions of REITs in terms of how they earn income are equity and mortgage REITs. Asset management giant Blackstone (BX) boasts a portfolio of assets under management reaching nearly $1 trillion, made up largely of real estate. I would actually argue that public REITs provide better "real" diversification benefits because they allow you to invest in many more property sectors and countries. Click here to learn more!. Having invested in data centres in the US and Europe, Blackstone has eyes on Asia-Pacific - starting with India. They claim that, unlike public REITs, BREIT is uncorrelated with the public stock market because it is a non-listed real estate investment vehicle. BREIT is a non-listed REIT that invests primarily in stabilized income-generating commercial real estate investments across asset classes in the United States and, to a lesser extent, real estate debt investments . Contrary to traded REITs, BREIT invests in perpetual-life REITs wherein NAV prices are valued daily or monthly with a limited liquidity period. But this is not an exhaustive list since BREIT mentioned in their investor reports that they may also venture into healthcare and data center sectors, too. Global investment firm Blackstone-sponsored Nexus Select Trust has filed the draft paper with market regulator Sebi to launch India's first public issue of retail REIT to raise around US$ 500 million (about Rs 4,000 crore), sources said. Some investors are seeking liquidity to cover losses incurred elsewhere. Blackstone Makes $524.5M Buyout Offer for Singapore's Soilbuild REIT. In many cases, the discount is 20, 30, 40, or even 50% in extreme cases. Philadelphia, PA, January 24, 2022 - Resource REIT, Inc. (the "REIT" or the "Company"), a publicly registered non-traded real estate investment trust, announced today that it has entered into a definitive agreement with Blackstone Real Estate Income Trust, Inc. ("BREIT"), under which BREIT will acquire all of the outstanding shares of common stock of the REIT for $14.75 per share . So far in 2022, Blackstone has bought or agreed to buy: Preferred Apartment . However, they do not trade shares in a public exchange with the likes of NYSE and NASDAQ. Cap rates have expanded a bit, but so has the property NOI in most cases. An Investors Perspective Into Blackstone REIT (BREIT), An Investors Perspective Into Apple Hospitality REIT, Everything You Want to Know About Armour Residential REIT, Why you Should Look into Crown Castle REITs, An Investors Perspective Into Whitestone REITs. 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. That was . BREITs common stocks are priced at their fair value in terms of NAV net asset value. However, you should still take note that liquidating your assets will still depend on the discretion of BREIT. 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. Certain parameters from financial statements will tell you how the company managed its investments through the ups and downs of the business cycle. As of March 17, 2021, it has a total of 112,104 stockholders. Currently, BREITs presence dominates in the NAV REIT market. If I owned BREIT, I would try to get out of it to invest in public REITs instead. Per maggiori informazioni sulle modalit di utilizzo dei dati, consulta la nostra Informativa sulla privacy e lInformativa sui cookie. Please. -. Join us for a 2-week free trial and get access to all my highest conviction investment ideas. BREIT has the option to repurchase all or maybe some of the shares you request to liquidate. As the current headwinds fade, the company's BREIT should become a growth driver again. 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. 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