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. 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. As a mortgage REIT, they have real estate debt investments through commercial and residential mortgage-backed securities. Select REIT Total Return Index 22.19% decline over the same period. Please. 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. The acquisition represents about 1.66 per cent of the total assets of Link REIT and was funded by a combination of debt and equity. To liquidate their assets, BREIT must repurchase their shares, which is not guaranteed. BREIT also has real estate debt investments through securities and loans backed by the U.S. market. ET, 3 Dividend Stocks to Buy Before the Bear Market Ends. 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. Certain parameters from financial statements will tell you how the company managed its investments through the ups and downs of the business cycle. SoCal Grocery Portfolio, Canarsie Plaza (NY), Bakers Center (PA), etc. They've been around for over 26 years and . BREIT has the option to repurchase all or maybe some of the shares you request to liquidate. Blackstone Makes $524.5M Buyout Offer for Singapore's Soilbuild REIT. Currently, BSR trades at a particularly stark discount. High Yield Landlord is managed by Leonberg Capital. If you have an ad-blocker enabled you may be blocked from proceeding. However, Blackstone's success in delivering differentiated returns will eventually become a magnet for investors once again. Nexus Select Trust has a portfolio of 17 operational shopping malls . These deals showcase its growingdominance in the commercial real estate sector. By. The REIT is marketed to wealthy individual investors. Source: BREIT Prospectus (as of June 30, 2021). Those sectors are benefiting from long-term tailwinds and inflation. Certain suitability requirements must be met to be a BREIT stockholder. All quotes delayed a minimum of 15 minutes. Many investors in the REIT are concerned that Blackstone has been slow to adjust the vehicle's valuation to that of publicly traded REITs that have taken a hit amid rising interest rates, a source close to the fund said. I have no business relationship with any company whose stock is mentioned in this article. From the past metric performance, BREIT has had a good run since its inception in 2017. Just because something isn't quoted does not mean that it isn't correlated or volatile. 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. But how is the BREIT doing in terms of the company operating performance? Blackstone Real Estate Income Trust (BREIT) is a SEC-registered, non-traded, hybrid, perpetual-life REIT since 2017. Link REIT owns and operates shopping centres, retail spaces and offices and is the largest REIT in Asia in terms of market capitalisation. February 27, 2023 3:33 PM. 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. 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. BREIT has the authority to issue a total of 10,100,000,000 shares. I wrote this article myself, and it expresses my own opinions. Published - Tuesday, 20 Dec, 2022. 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%. On Thursday, the firm said the REIT had agreed to sell its 49.9% interest in two Las Vegas casinos for $1.27 billion. LONDON (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. Update 2018-05-11: Blackstone reports that it's leverage has increased from below-average 41% to above average 60% (average for core plus is 50%). 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. With dividends reinvested, the benchmark SPDR S&P 500 ETF (ticker: SPY) lost 18.2% last . The asset manager partners with big money players like pension funds and insurance companies to provide strong returns and steady income. (Reuters) - Cvent Holding Corp, a U.S. software provider that facilitates in-person and virtual meetings, has rejected a $3.9 billion acquisition offer from buyout firm Blackstone . Like Salesforce.com, inc. (NYSE:CRM), Roblox Corporation (NYSE:RBLX), and Advanced Micro Devices, Inc. (NASDAQ:AMD), HubSpot, Inc. (NYSE:HUBS) is a stock that many elite hedge funds have been . The 2 main distinctions of REITs in terms of how they earn income are equity and mortgage REITs. 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 . Though the dividend yield of ~3.2% may seem low, it is actually quite high compared to the yields of its closest peers in the Sunbelt multifamily space: With over 30% upside to fair value, it would not be surprising if Blackstone at least made an attempt to buy BSR. Cap rates have expanded a bit, but so has the property NOI in most cases. Blackstone Group has been on an aggressive REIT buying spree in the last few years. The stockholder distribution across the class shares is shown below. Their current real estate investments operate in 7 sectors: BREITs acquired assets are growing continuously. Clearly, that is Blackstone's view. 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 . . To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. 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. This button displays the currently selected search type. While its recently announced deals will utilize some more of that capital, additional money is likely to continue flowing into its coffers. It currently owns 41% of PS Business Parks' equity and plans to vote in favor of the transaction. 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. As of FY 2020, each common stock class received a gross distribution of $0.6354 per share. That means Blackstone will undoubtedly continue making headline-grabbing deals. In 2021, BREIT raised nearly $25 billion from investors. Is It a Buy Right Now? 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%. According to their 2020 annual report, they hold 1,370 real estate properties and 228 positions in real estate debt investments. The REIT's quarterly dividend of ~$0.13 (paid monthly in $0.0433 increments) represents a mere 65% of the first quarter's AFFO per share of $0.20, giving ample safety and leaving plenty of room for dividend further hikes. Cuando se ampla, se proporciona una lista de opciones de bsqueda para que los resultados coincidan con la seleccin actual. This was followed by the Class I shares, Class D shares, and then the Class T shares. Class S and T shares dont include the upfront 3.5% sales charge at initial subscription yet. Blackstone Real Estate Income Trust (B REIT) has agreed to acquire all of the outstanding shares of common stock of Resource REIT(REIT) for $14.75 per share in an all-cash transaction valued at $3.7 billion.. This year, the company has set its sights particularly on acquisitions of real estate investment trusts ("REITs"). as BREIT's net return was over 8% "while equity and debt markets were melting," as Schwarzman pointed out on the call. The $71 billion Blackstone Real Estate Income Trust (BRET) saw investor withdrawals of nearly $9.9 billion last year. DLF holds bulk of its rental assets (offices and . While commercial real estate itself is performing extraordinarily well this year and retaining its value, publicly traded REITs have shed around 20% of their value and now mostly trade at discounts to NAV. Price as of February 28, 2023, 4:00 p.m. Currently, BREITs presence dominates in the NAV REIT market. However, it recovered by the end of 2020 and soared in the first half of 2021. Today, he is the author of "High Yield Landlord - the #1 ranked real estate service on Seeking Alpha. While a cheaper fair value is good news for new investors. At $16.50 per share (as of this writing), BSR trades at a remarkable 25% discount to its Q1 2022 NAV per share of $21.98. The unconsolidated investments come from their joint venture with MGM Growth Properties LLC, wherein BREIT owns 49.9% of interest. This was followed close behind by Class I shares at $12.9/share. The U.S. real estate investment trust, or REIT, sector was hit abnormally hard during the 2022 bear market. 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. This is the most important reason. For starters, its, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Motley Fool Issues Rare All In Buy Alert, Copyright, Trademark and Patent Information. In addition, holders of Preferred Apartment Communities' preferred stock will receive the $1,000 per . Even Blackstone's COO indirectly told us in the Q2 conference call that public REITs are a lot more opportunistic today: "The best opportunities today are clearly in the public markets on the screen and that's where we're spending a lot of time.". In many cases, the discount is 20, 30, 40, or even 50% in extreme cases. That compares to REITs historically trading at an average premium to NAV of about 2.5%. Last REIT standing. STAG offers an attractive, 4.7% dividend yield with a payout ratio slightly below 70%. The residential rental market is another. Goldman Sachs mulls deal options after consumer flop, TotalEnergies buys CEPSAs upstream assets in Abu Dhabi, Reporting by Chibuike Oguh and Herb Lash in New York Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Global investment firm Blackstone-sponsored Nexus Select Trust has filed the draft paper with market regulator Sebi to launch India's first public issue of retail REIT to raise around US$ 500 million (about Rs 4,000 crore), sources said. 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. I have no business relationship with any company whose stock is mentioned in this article. (the "Adviser"). Is this happening to you frequently? BREIT is a REIT where shares are held by investors, but those shares aren't traded. Matthew DiLallo has positions in Blackstone and has the following options: short June 2023 $60 puts on Blackstone. Last week, it reached a $12.8 billion deal to acquire student housing-focused, . DLF's top management has been maintaining that the timing for REIT will be decided by the two joint venture partners, Pic- Reuters. Is this happening to you frequently? As an equity REIT, they have a diverse coverage of real estate investments. Public REITs, on the other hand, trade at a >6% dividend yield in many cases with lower payout ratios, and also offer significant upside potential since they are priced at large discounts to their net asset value. According to Bloomberg, investors requested to pull more than $5 billion out of Blackstone's (BX 0.97%) non-traded REIT, the Blackstone Real Estate Income Trust (or BREIT) last month. If I owned BREIT, I would try to get out of it to invest in public REITs instead. Click here to learn more!. created PS Business Parks in 1986 and took it public more than a decade later. Matthew DiLallo owns Public Storage. If we were just investing in BREIT, we would miss these opportunities to gain geographic diversification. Having invested in data centres in the US and Europe, Blackstone has eyes on Asia-Pacific - starting with India. But most public REITs are internally-managed. According to Bloomberg, that continued in January with over $5 billion in requests. July 16, 2021. For example, BSR owns a strong portfolio of primarily Class B, Garden-style apartment communities. 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 . 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. Blackstone is also active in credit, infrastructure, hedge funds, insurance, secondaries, and growth . So this review has been updated with that information. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Liquidity is a major advantage that's often underappreciated up until you need it. Price as of February 28, 2023, 4:00 p.m. 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 suggests it could make more headline-grabbing deals this year. BREIT is an externally-managed REIT. 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