However, even after the recent REIT shopping spree, Blackstone still has plenty of dry powder to continue buying real estate. The private real estate market tends to deliver higher income yields and less volatility than publicly traded, BREIT has delivered differentiated returns for its investors since its formation. In addition to having passed all CFA exams, Jussi holds a BSc in Real Estate Finance from University Nrtingen-Geislingen (Germany) and a BSc in Property Management from University of South Wales (UK). As a result, it will receive about $2.7 billion in cash when the deal closes. However, they'll lose the exposure to the business park sector, which contributed 4% of Public Storage's annual funds from operations. The unconsolidated investments come from their joint venture with MGM Growth Properties LLC, wherein BREIT owns 49.9% of interest. The people familiar with the matter declined to be identified because the information was not public. BREITs occupancy rates are all above 90% for almost all sectors, with the exemption of the hotels/hospitality sector. Blackstone Real Estate Income Trust Inc. agreed to buy Resource REIT Inc. in a deal valued at $3.7 billion, expanding its bet on U.S. rental housing. 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. I have no business relationship with any company whose stock is mentioned in this article. 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. For example, Blackstone provides the option to repurchase shares from investors once a month. I don't know many asset classes that perform -- outperform indexes by 3,000 basis points." Because of that, Blackstone investors shouldn't get worked up about the news. Total returns could be higher if you account for the accumulated share distributions throughout your investment years. Notes: Class D shares dont include the upfront 1.5% sales charge at initial subscription yet. Blackstone Real Estate Income Trust, Inc. (BREIT) has real estate investments in diverse sectors such as residential, industrial, office, storage, and hotel/hospitality. And management is also skilled and motivated, as insiders own around 40% of the company. Blackstone also said in the prospectus it had access to $9.3 billion in "immediate liquidity.". This year, the company has set its sights particularly on acquisitions of real estate investment trusts ("REITs"). 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. So this review has been updated with that information. STAG is a ~$10 billion enterprise value industrial REIT specializing in higher yielding, single-tenant net leased properties largely in secondary and tertiary markets. Tombol ini menampilkan jenis pencarian yang dipilih saat ini. The curbs came because redemptions hit pre-set limits, rather than Blackstone setting the limits on the day. However, they also have non-U.S. investments, particularly in Europe, to a small extent (by about 1%). According to their 2020 annual report, they hold 1,370 real estate properties and 228 positions in real estate debt investments. Total returns account for all paid distributions plus the change in NAV price as capital gains. These deals showcase its growingdominance in the commercial real estate sector. Despite the pandemic, they acquired worth $10.5B of real estate properties in the multifamily, industrial, and net lease sectors in 2020. Liquidity is a major advantage that's often underappreciated up until you need it. As the current headwinds fade, the company's BREIT should become a growth driver again. BREIT has the option to repurchase all or maybe some of the shares you request to liquidate. 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. 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. ("Net asset value" is akin to an adjusted book value for REITs using estimated market values for their real estate. Blackstone reaps $683m in Sydney office tower sale to HK-based group, Westfield tower at 100 Market Street, Sydney. Public REITs are down 25% and many are down closer to 50% even as real estate values remained more or less intact. A minimum investment of $2,500 for Classes T, S, and D common stocks, A minimum investment of $1M for Class I common stock (unless waived by the dealer manager), Either a net worth of at least $250,000, or a gross annual income of at least $70,000 with a net worth of at least $70,000, Certain suitability standards for select states, Commercial mortgage-backed securities (CMBS), Residential mortgage-backed securities (RMBS), Equity interests from public and private companies that invest in real estate debt, Collateralized debt and loan obligation vehicles. ), And this is based on conservative estimates of property values. Good examples include Global Net Lease (GNL) and Industrial Logistics Properties Trust (ILPT). Select REIT Total Return Index 22.19% decline over the same period. BREIT also has real estate debt investments through securities and loans backed by the U.S. market. That was almost 70% of all the capital raised by non-traded REITs that year. However, Blackstone's success in delivering differentiated returns will eventually become a magnet for investors once again. July 16, 2021. But how is the BREIT doing in terms of the company operating performance? That left it with $36.3 billion of dry powder. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. If you have an ad-blocker enabled you may be blocked from proceeding. BREIT, the non-traded real . Simply Self Storage, East Coast Storage Portfolio, Cactus Storage Portfolio, etc. 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. Learn More. Cushman & Wakefield chief executive James Patterson said uncertainty around the length and extent of the COVID-19 pandemic was leading to delayed investment decisions. BREIT issues consistent monthly distributions since its inception. Their recent investments are, namely, in residential, industrial, net lease, hospitality (leisure market), self-storage, retail, and office. 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. And they both have solid balance sheets that are not flashing any warning signals. Since its inception in 2017, BREIT has consistently issued monthly distributions to its stockholders. Do your own research or seek the advice of a qualified professional. Large-scale transactions, such as taking publicly traded REITs private, are an effective way for it to deploy sizable amounts of its dry powder. Blackstone's public non-listed REIT, BREIT, has been one of the best-performing REITs of this year.It has managed to deliver a 9% total return with low volatility even as the public . "These all will continue put pressure on Blackstone's premium valuation," they wrote. 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 helped it turn into an asset management behemoth. I'll do that again for you. Currently, Blackstone has a market capitalization of $66.78 billion. 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. 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. 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. Jupiter 12 Industrial Portfolio, Canyon Industrial Portfolio, Meridian Industrial Properties, etc. As of March 17, 2021, it has a total of 112,104 stockholders. Managing more than $975 billion, the company invests money for wealthy . Overall, BREIT is one of the leading players in the NAV REIT market industry. BREIT is a hybrid REIT because it deals with both. Source: BREIT Prospectus (as of June 30, 2021). 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. This means that there is an external asset manager, in this case, Blackstone, that takes care of the management in exchange for fees. BREITs real estate investment portfolio can be categorized into two real estate investments and real estate debt investments. The Motley Fool has positions in and recommends Blackstone. Those returns will eventually draw more investors to BREIT. The REIT is marketed to wealthy individual investors. 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. Residential, specifically multi-family homes, bring the most rental revenue to BREITs portfolio, followed by the industrial sector. Matthew DiLallo has positions in Blackstone and has the following options: short June 2023 $60 puts on Blackstone. 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. 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 . Blackstone's purchase of American Campus makes student housing a fully privately held asset class in the US. Learn More. That's one of several long-term growth drivers. Contrary to traded REITs, BREIT invests in perpetual-life REITs wherein NAV prices are valued daily or monthly with a limited liquidity period. (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 . Blackstone Group (BX 1.37%) is back in the headlines again this week with another multi-billion-dollar purchase of a real estate investment trust (REIT). Cliccando su Accetta tutto accetti che Yahoo e i suoi partner possano trattare i tuoi dati personali e utilizzare tecnologie come i cookie per mostrarti annunci e contenuti personalizzati, per la misurazione degli annunci e dei contenuti, per l'analisi del pubblico e per lo sviluppo dei prodotti. Clearly, the company will buy whatever it views as the most attractive viable deal. Class S shares were the first issued common stock of BREIT in 2017 at $10. BREIT outsources third-party pricing service providers to determine the fair value for these debt investments. Is this happening to you frequently? 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. They claim that, unlike public REITs, BREIT is uncorrelated with the public stock market because it is a non-listed real estate investment vehicle. High Yield Landlord is managed by Leonberg Capital. Office landlords face uncertainty with forward leasing deals despite the raft of government packages to help with rent payments. Invest better with The Motley Fool. This gives a hint as to why Blackstone has been hoovering up REITs like a vacuum this year. It still has a lot of dry powder after its latest deal, suggesting its shopping REIT shopping spree could continue. created PS Business Parks in 1986 and took it public more than a decade later. It invests in real estate properties across 8 sectors and real estate debt through mortgage-backed securities and other real estate-related loans. Class S and T shares dont include the upfront 3.5% sales charge at initial subscription yet. Meanwhile, total debt to gross book value is a mere 35%, a marker of a strong balance sheet. Dividends are paid and capital gains, if any, are shared. 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 . Credit Suisse analysts wrote in a note that they expected the REIT's woes to weigh on Blackstone's fee-related earnings and assets under management. However, it recovered by the end of 2020. Receive at least 75% of gross income from real estate, such as real property rents . 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. Published - Tuesday, 20 Dec, 2022. 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. 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. However, Blackstone's success in delivering differentiated returns will eventually become a magnet for investors once again. Blackstone Real Estate Income Trust, Inc. (B REIT) has agreed to acquire Home Partners of America (HPA) for $6 billion. Last REIT standing. Global investment firm Blackstone-sponsored Nexus Select Trust has filed the draft paper with market regulator Sebi to launch India's first public issue of retail REIT to raise around US$ 500 million (about Rs 4,000 crore), sources said. Currently, BSR trades at a particularly stark discount. The deal values the, One interesting aspect of this deal is that it will provide an unexpected windfall to shareholders of. They earn income by leasing out rental spaces to clients. And apparently this is the new target. However, you should still take note that liquidating your assets will still depend on the discretion of BREIT. 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