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Blackstone’s $69 billion real estate fund announced today that it’s limiting redemptions
Posted on 12/1/22 at 8:24 pm
Posted on 12/1/22 at 8:24 pm
quote:
Blackstone Real Estate Income Trust (BREIT) is a real estate investment trust that invests in apartments, industrial, retail, and hotels.
It’s one of the largest real estate funds in the world, even though it only started in 2016.
The fund is only sold to wealthy investors through select financial advisers and isn’t available to the general public.
Their website says that 3-year annualized returns are 15.5% with a 4.4% distribution rate.
So what’s going on with the fund now?
This week, Blackstone announced the fund had hit its quarterly withdrawal limit.
Too many investors are trying to pull their money out at once.
LINK
7
Posted on 12/1/22 at 8:26 pm to Street Hawk
I remember when they were the boogeyman du jour a few months ago and now they're having issues.
Posted on 12/1/22 at 8:28 pm to SlowFlowPro
quote:
I remember when they were the boogeyman du jour a few months ago and now they're having issues.
"They own EVERY single SFR in the world!! We will own nothing and like it"
Posted on 12/1/22 at 8:35 pm to Street Hawk
Normal feature of private funds and I’m not shocked. Folks think there’s some risk coming to RE and bailing while valuations have held up.
Definitely not an all clear signal moving forward, even if it’s not a “catastrophic economic collapse” like I keep hearing about.
Definitely not an all clear signal moving forward, even if it’s not a “catastrophic economic collapse” like I keep hearing about.
Posted on 12/1/22 at 8:37 pm to Street Hawk
quote:
The fund is only sold to wealthy investors through select financial advisers and isn’t available to the general public.
Now try this with the products and services that your company sells
Posted on 12/1/22 at 11:26 pm to Street Hawk
BX and all these private investment firms are going to be in quite the pickle when their investments that haven't gotten a new mark to market in a year or two start revaluing.
If youre a private company, valuations only come officially when you are going through a round of funding. BX is carrying shite on their books that is actually 75-90% less valuable but they don't have to show it until the company runs out of runway. It's a waiting game.
If youre a private company, valuations only come officially when you are going through a round of funding. BX is carrying shite on their books that is actually 75-90% less valuable but they don't have to show it until the company runs out of runway. It's a waiting game.
This post was edited on 12/1/22 at 11:27 pm
Posted on 12/2/22 at 6:15 am to Pendulum
How exactly do you know they are carrying “shite” on their books?
Posted on 12/2/22 at 6:56 am to snakanator
quote:
How exactly do you know they are carrying “shite” on their books?
They bought a ton of real estate at the peak of a bubble. How can they not?
Posted on 12/2/22 at 7:02 am to SlowFlowPro
Blackstone is not Blackrock.
Posted on 12/2/22 at 7:03 am to tigeralum06
Well this is a rare occasion where I welcome people laughing at me and I won't edit any posts to further that goal.
Posted on 12/2/22 at 7:07 am to LSUcam7
quote:
Normal feature of private funds and I’m not shocked. Folks think there’s some risk coming to RE and bailing while valuations have held up.
Definitely not an all clear signal moving forward, even if it’s not a “catastrophic economic collapse” like I keep hearing about.
I'm not as familiar with them.
However, they only lose money if they miss their mark on vacancies or if rents shrink. Mark to market has no bearing on profitability if they didn't intend to sell.
So? As long as employment numbers stay strong, they will be fine. If unemployment becomes a hot engine like inflation the past couple of years, that is when the cookie crumbles.
Low cost inventory (real estate dip) just gives them more clearance to buy at better value.
Posted on 12/2/22 at 7:36 am to Street Hawk
They had a big investment in the new Disney pedophile movie that didn’t pan out
Posted on 12/2/22 at 9:00 am to Street Hawk
2021 was as good as 2022 is bad. What goes up . . .
I thought they started back in 2008 after the financial and real estate collapse. They looked like the smartest guys in the room flush with liquidity. Lack of liquidity has now come calling. Sold off some gambling assets to ease the pain.
I thought they started back in 2008 after the financial and real estate collapse. They looked like the smartest guys in the room flush with liquidity. Lack of liquidity has now come calling. Sold off some gambling assets to ease the pain.
Posted on 12/2/22 at 9:10 am to SlowFlowPro
quote:
I remember when they were the boogeyman du jour a few months ago and now they're having issues.
Are you saying Boogeymen cannot have administrative and budgetary hiccups? Do you even Death Star?
Posted on 12/2/22 at 9:28 am to snakanator
Why do you think they are taking their money out?
LINK
While not exactly what I was saying, in this specific case they are limiting withdrawals because they have to limit outflows or else they have to sell assets at under their latest valuation.
LINK
quote:
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. Rising interest rates weigh on real estate values because they make financing properties more expensive.
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. Select REIT Total Return Index (.DWRTFT) 22.19% decline over the same period.
quote:
That outperformance has some investors questioning how Blackstone comes up with the valuation of its REIT, said Alex Snyder, a portfolio manager at CenterSquare Investment Management LLC in Philadelphia.
"People are taking profits at the value Blackstone says their REIT shares are at," said Snyder.
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.
While not exactly what I was saying, in this specific case they are limiting withdrawals because they have to limit outflows or else they have to sell assets at under their latest valuation.
This post was edited on 12/2/22 at 10:14 am
Posted on 12/2/22 at 9:46 am to Pendulum
quote:
While not exactly what I was saying, in this specific case they are limiting withdrawals because they have to limit outflows or else they have to sell assets at under their latest valuation
Correct. It has been a big discussion in REIT land how public REITS were down big but Private Equity types were holding strong. So if you were invested in the Private type you would obviously want to sell some and invest in the discounted ones.
Posted on 12/2/22 at 11:04 am to SlowFlowPro
they bought mostly rental housing and industrial real estate, which has outperformed most other asset classes. I agree they will have some valuation issues in the near term with the rise in cap rates and interest rates, however their assets are not low quality. Go to the BREIT website and check out what they published yesterday, its interesting.
All being said, winter is here for real estate but if anyone can weather the storm its BX.
Disclaimer - I own shares of BX and not BREIT.
All being said, winter is here for real estate but if anyone can weather the storm its BX.
Disclaimer - I own shares of BX and not BREIT.
Posted on 12/2/22 at 11:20 am to snakanator
BX is one of my largest positions as well, 8% right now. I lightened a little after last earnings when I heard the comments on valuations that we are discussing, but it's been very good to me over the years. About 1% of my OA portfolio is a purchase of BX I made on 3/23/20 luckily. Divi is almost 6% now, probably a safe drip and forget for years at this level, but if rates stay high for longer than people think, could be some short term pain next year relative to rest of the market which has me a little nervous.
This post was edited on 12/2/22 at 11:23 am
Posted on 12/2/22 at 3:07 pm to SlowFlowPro
quote:
They bought a ton of real estate at the peak of a bubble. How can they not?
Gov't bailout which results in government ownership of private real estate.
Posted on 12/6/22 at 1:53 pm to Street Hawk
Blackstone's attempt to own and inflate every stick of real estate in the country has hit the wall. The hapless peasants are destitute. The insiders have absconded. If you are still in, you are stuck. boohoo. You didn't need it anyway.
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