Having invested in data centres in the US and Europe, Blackstone has eyes on Asia-Pacific - starting with India. Therefore, I continue to accumulate real estate through the public market. Their recent property acquisitions recorded as of June 2021 were 15 investments 17 residential properties, 28 industrial properties, and 1 office property amounting to $2.1B. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. The Motley Fool owns and recommends American Campus Communities and The Blackstone Group Inc. 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. DISCLAIMER: Jussi Askola is not a Registered Investment Advisor or Financial Planner. Overall, BREIT is one of the leading players in the NAV REIT market industry. At times, they might not even repurchase at all when you need the money urgently. You can buy or sell with minimal fees with just a few clicks of mouse. Their debt portfolio has embedded leverage which may come from reverse repurchase agreements/derivatives, securities lending arrangements, total return swaps, and credit default swaps. Using different valuation methods, real estate services firm Jones Lang LaSalle (JLL) recently posited that REITs' discount to NAV is over 15%, commenting that a "sustained dislocation in public and private values could be a precursor of opportunities for fundamentals driven private market participants, leading to take-private M&A.". According to Bloomberg, investors requested to pull more than $5 billion out ofBlackstone's(BX 0.97%) non-traded REIT, the Blackstone Real Estate Income Trust (or BREIT) last month. I don't know many asset classes that perform -- outperform indexes by 3,000 basis points." That, for us at High Yield Landlord, is not enough on its own. 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 curbs came because redemptions hit pre-set limits, rather than Blackstone setting the limits on the day. That has put STAG at a 30% discount to NAV, one of the steepest discounts in its history as a public REIT. 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. See here for a complete list of exchanges and delays. As of June 30, 2021, their total properties were 1,463. 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. 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. Matthew DiLallo owns Public Storage. 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. That's a 39% premium to its stock price on Feb. 9, when news broke that . 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. BREIT has a redemption plan, but as we highlighted in a recent article, this redemption plan can be quite restrictive and Blackstone recently limited withdrawals because too many investors sought to get at out at once. July 16, 2021. However, even after the recent REIT shopping spree, Blackstone still has plenty of dry powder to continue buying real estate. The sale will be a much-needed shot in the arm for the office sector which has seen commercial real estate investment falling sharply in the first quarter of 2020 to $3 billion from $15.9 billion in the previous quarter. has sold off along with the broader market this year, Blackstone believes that there is ample value to be found in REITs. They were down a further 2% on Friday morning at $83.45. I don't know many asset classes that perform -- outperform indexes by 3,000 basis points. 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). Two sources familiar with the matter said turmoil in Asian markets, fueled by concerns about China's economic prospects and political stability, contributed to the redemptions. 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 . So far in 2022, Blackstone has bought or agreed to buy: Preferred Apartment . The index is down 17%, we were up 2.3%. BREIT has a diverse real estate property portfolio. But most public REITs are internally-managed. 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. I have no business relationship with any company whose stock is mentioned in this article. So this review has been updated with that information. 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 . The industry leader for online information for tax, accounting and finance professionals. ET, This 4.5%-Yielding Dividend Stock Has $50 Billion to Continue its Real Estate Buying Binge, 1 Roaring Dividend Stock That's Leading the Market Recovery. If you dont like it, we wont charge you a penny! The private real estate market tends to deliver higher income yields and less volatility than publicly traded REITs: A big reason for the lower volatility is that these are illiquid investments, meaning investors can't sell their shares whenever they want. Source: BREIT Fact Card (as of July 2021). Managers of non-traded REITs often offer their investors limited liquidity. As a result, it will receive about $2.7 billion in cash when the deal closes. The deal values the, One interesting aspect of this deal is that it will provide an unexpected windfall to shareholders of. 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. 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 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. And our opportunistic funds protected capital, down only 1%, so we only performed by 16% for our customers over the index. Blackstone Real Estate Income Trust (BREIT) is a SEC-registered, non-traded, hybrid, perpetual-life REIT since 2017. Were working to restore it. Multifamily REIT Preferred Apartment Communities announced . 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. Each type of share has a par value of $0.01. Making the world smarter, happier, and richer. -. ), And this is based on conservative estimates of property values. Global investment firm Blackstone-sponsored Nexus Select Trust has filed the draft paper with market regulator Sebi to launch India's first public issue of retail REIT to raise around US$ 500 million (about Rs 4,000 crore), sources said. Blackstone is a premier global investment manager. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. However, they also have non-U.S. investments, particularly in Europe, to a small extent (by about 1%). Dati relativi al dispositivo e alla connessione a Internet, come l'indirizzo IP, Attivit di navigazione e di ricerca durante l'utilizzo dei siti web e delle app di Yahoo. SoCal Grocery Portfolio, Canarsie Plaza (NY), Bakers Center (PA), etc. 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. He added that the REIT had ample cash reserves to "weather pretty much any storm." 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. 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. Puoi cambiare le tue preferenze in qualunque momento nella sezione Le tue impostazioni per la privacy. I am not receiving compensation for it (other than from Seeking Alpha). Although Santarelli kept his price target for Gaming & Leisure Properties Inc. at $60 per share, he bumped his . The figure above shows the historical NAV price of the 4 types of class shares. Class S and T shares dont include the upfront 3.5% sales charge at initial subscription yet. And the company isn't obligated to make any repurchases, so it could choose to buy back even fewer shares than the limit or none at all. With billions of dollars in dry powder across its real estate private equity funds and cash continuing to pour into its funds, Blackstone will likely continue its real estate shopping spree. 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. 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. That's one of several long-term growth drivers. The chart below shows the YTD performance of all class share classes, plus the since inception date returns. Clicca su Gestisci impostazioni per maggiori informazioni e per gestire le tue scelte. 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. 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 . [added emphasis]. So far, its highest total net distribution (includes deductions of corresponding fees already) was Class I shares in FY 2019. Matthew DiLallo has positions in Blackstone and has the following options: short June 2023 $60 puts on Blackstone. This is a much better management structure because the management is hired as employees of the REIT. Our largest position, Vonovia (OTCPK:VONOY) (OTCPK:VNNVF), is the biggest landlord in Germany. Sarah Borchersen-Keto. This button displays the currently selected search type. Instead of daily price fluctuations, NAV REITs have a much less volatile movement. Blackstone's purchase of American Campus makes student housing a fully privately held asset class in the US. This gives a hint as to why Blackstone has been hoovering up REITs like a vacuum this year. A Blackstone spokesperson declined to comment on how the New York-based firm calculates the valuation of its REIT, but said its portfolio was concentrated in rental housing and logistics in the southern and western United States that have short duration leases and rents outpacing inflation. 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. 2021 YTD returns were the highest because BREIT has recovered well from the effects of the COVID-19 pandemic. Blackstone Group has been on an aggressive REIT buying spree in the last few years. The average annual cost of a public internally-managed REIT is around 0.6%, and some REITs like Realty Income (O) have it as low as 0.4%. Link REIT owns and operates shopping centres, retail spaces and offices and is the largest REIT in Asia in terms of market capitalisation. I have no business relationship with any company whose stock is mentioned in this article. The price history tells you how the company is valued at face value. Please be aware of the risks associated with these stocks. The continued surge in such requests has kept the pressure on Blackstone's stock price. Blackstone Makes $524.5M Buyout Offer for Singapore's Soilbuild REIT. The stock has a fifty day moving average price of $22.70 and a 200 day moving average price of $24.69. Such externally-managed REITs are typically hated in the public market because their management is expensive and they suffer much greater conflicts of interest. 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. Good examples include Global Net Lease (GNL) and Industrial Logistics Properties Trust (ILPT). Since its inception in 2017, BREIT has consistently issued monthly distributions to its stockholders. 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). The 2 main distinctions of REITs in terms of how they earn income are equity and mortgage REITs. Clearly, the company will buy whatever it views as the most attractive viable deal. I wrote this article myself, and it expresses my own opinions. They explain on a conference call earlier this year that: "For the first six months of the year, our real estate strategies appreciated 9% to 10% versus a 20% decline in the REIT index, equaling an outperformance of roughly 3,000 basis points. As of July 2021, BREIT has a total of 1,508 real estate properties in the . That suggests it could make more headline-grabbing deals this year. BREITs common stocks are priced at their fair value in terms of NAV net asset value. 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. But I think that public REITs are today far more opportunistic than BREIT. The total revenue coming from rental income also seems to increase consistently. 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. For example, Blackstone provides the option to repurchase shares from investors once a month. Natalie Wong. But the better way to gauge a REITs performance is through its FFO. I think that the risk-to-reward of these discounted public REITs are far better. 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 . The majority of their real estate properties are in the residential (especially multifamily homes) and industrial sectors. NAV REITs do away with daily price fluctuations, making them less volatile compared to traded REITs. This was followed by the Class I shares, Class D shares, and then the Class T shares. The surge in redemptions at BREIT continues to get a lot of attention. ("Net asset value" is akin to an adjusted book value for REITs using estimated market values for their real estate. CRE Herald. Aside from contributing to the overall returns, real estate debt investments also provide added liquidity especially for cash management in the Companys share repurchase plans. BREIT had been a big growth driver for Blackstone. Today, he is the author of "High Yield Landlord - the #1 ranked real estate service on Seeking Alpha. Please. That was . 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. Some investors are seeking liquidity to cover losses incurred elsewhere. See here for a complete list of exchanges and delays. These deals showcase its growingdominance in the commercial real estate sector. 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