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). If you dont like it, we wont charge you a penny! 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. 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. The REIT is marketed to wealthy individual investors. So this review has been updated with that information. Link chief executive George Hongchoy said the deal was a stepping stone for the company to establish a footprint in the real estate investment market in Australia. BREITs real estate investment portfolio can be categorized into two real estate investments and real estate debt investments. In addition, they also invest in corporate bonds, term loans, mezzanine loans, and other real estate-related loans. The deal will add a large-scale portfolio of business park, office, and industrial assets to Blackstone's burgeoning real estate portfolio. 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. The figure above shows the historical NAV price of the 4 types of class shares. A disadvantage of non-traded REITs is the higher management fees as compared to traded REITs. Blackstone is able to purchase giant holdings in a . Clearly, as the Vanguard Real Estate Index (VNQ) has sold off along with the broader market this year, Blackstone believes that there is ample value to be found in REITs. The people familiar with the matter declined to be identified because the information was not public. Is now still a better time to invest in BREIT, or should you rather consider public REITs? At times, they might not even repurchase at all when you need the money urgently. 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 earns lucrative fees for managing BREIT and delivering on its return objectives for investors. All quotes delayed a minimum of 15 minutes. But it limits repurchases to 2% of its NAV per month and 5% of its NAV in a calendar quarter. NAV REITs do away with daily price fluctuations, making them less volatile compared to traded REITs. Sarah Borchersen-Keto. BREIT is a SEC-registered REIT since 2017. In the . 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 "Our business is built on performance, not fund flows, and performance is rock solid," the spokesperson said. If I owned BREIT, I would try to get out of it to invest in public REITs instead. Select REIT Total Return Index (.DWRTFT) 22.19% decline over the same period. Currently, BREITs presence dominates in the NAV REIT market. July 16, 2021. They've . KentWeakley. It invests in real estate properties across 8 sectors and real estate debt through mortgage-backed securities and other real estate-related loans. 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. I think that the risk-to-reward of these discounted public REITs are far better. These properties are overwhelmingly concentrated in Texas, especially Austin, Dallas/Fort Worth, and Houston. This is surely a huge factor in the discount at which BSR typically trades. Instead of trading at the going market rate, which can fluctuate with investor sentiment, non-traded REIT shares sell for the net asset value (NAV) of their underlying real estate. These deals showcase its growing, dominance in the commercial real estate sector, However, even after the recent REIT shopping spree, Blackstone still has plenty of dry powder to continue buying real estate. You are responsible for your own investment decisions. Instead, it continues to deliver differentiated performance. Those sectors are benefiting from long-term tailwinds and inflation. Invest at least 75% of total assets in real estate or cash. As of July 2021, BREIT has a total of 1,508 real estate properties in the . That left it with $36.3 billion of dry powder. 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. 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. 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. Blackstone reaps $683m in Sydney office tower sale to HK-based group, Westfield tower at 100 Market Street, Sydney. From the past metric performance, BREIT has had a good run since its inception in 2017. Blackstone (BX.N) limited withdrawals from its $69 billion unlisted REIT on Thursday after redemption requests hit pre-set limits . Blackstone claims that its REIT is superior to others. 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 . All of these are made possible through sponsorship from the Real Estate Group of The Blackstone Group, Inc. with decades of real estate experience. EdR Student Housing Portfolio (10,610 units), Southeast MH portfolio (8,563 units), Acorn Multifamily Portfolio (8,309 units), etc. Overall, BREIT is one of the leading players in the NAV REIT market industry. As of FY 2020, each common stock class received a gross distribution of $0.6354 per share. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. The index is down 17%, we were up 2.3%. I am not receiving compensation for it (other than from Seeking Alpha). 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. BREIT has a diverse real estate property portfolio. Its president Jonathan Gray was elevated and made successor to Chief Executive Stephen Schwarzman as a result of his success in property investing. Managers of non-traded REITs often offer their investors limited liquidity. It was bought on a sharp yield of close to 4 per cent. Blackstone Inc. will purchase American Campus Communities, Inc. (NYSE: ACC) in a $12.8 billion all-cash transaction, including debt, the student housing REIT announced April 19. Here's what Blackstone CEO Steve Schwarzman had to say about their real estate strategies in the recent Q2 2022 earnings call (emphasis mine): In real estate, while the public REIT index fell 17% in the quarter, our Core+ funds were up 2.3%. According to their 2020 annual report, they hold 1,370 real estate properties and 228 positions in real estate debt investments. Published - Tuesday, 20 Dec, 2022. BREIT is an externally-managed REIT. Bellagio (NV), MGM Grand (NV), & Mandalay Bay (NV). Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. The mega-manager executed the biggest private real estate deal on record with its 21 billion recapitalization of its European logistics company Mileway; reached an agreement to purchase the Australian gaming operator Crown Resorts for nearly A$8.9 billion ($6. Blackstone is the 1000-pound gorilla in any real estate room. Our Standards: The Thomson Reuters Trust Principles. That was . Matthew DiLallo owns Public Storage. I'll do that again for you. 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. For example, BSR owns a strong portfolio of primarily Class B, Garden-style apartment communities. Nexus Select Trust has a portfolio of 17 operational shopping malls . Class S shares were the first issued common stock of BREIT in 2017 at $10. 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.. When expanded it provides a list of search options that will switch the search inputs to match the current selection. 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 . Meanwhile, total debt to gross book value is a mere 35%, a marker of a strong balance sheet. 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, Blackstone's success in delivering differentiated returns will eventually become a magnet for investors once again. That's a 39% premium to its stock price on Feb. 9, when news broke that . Blackstone and Soilbuild are selling Bukit Batok Connection months after privatising Soilbuild REIT US developer and investment firm Hines has made its first acquisition in the Singapore market, teaming up with German fund manager DWS Group to buy a ramp-up workshop in the Bukit Batok area from a Blackstone-controlled trust for S$93.8 million ($69 million). With 8.1% and 4.3% of the shares outstanding respectively, BlackRock, Inc. and Blackstone Inc. are the second and third largest shareholders. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. 2021 YTD returns were the highest because BREIT has recovered well from the effects of the COVID-19 pandemic. 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. 22/06/2021. Many non-traded REITs suspended their repurchase programs during the early days of the pandemic. The REIT turmoil is a setback for two of Blackstone's strategies that helped it become the world's biggest alternative asset manager with $951 billion in assets: real estate investing and attracting high net-worth individuals. Blackstone Group has been on an aggressive REIT buying spree in the last few years. Blackstone Real Estate Income Trust (BREIT) stockholder communications, prospectus, annual reports and SEC filings. The Vanguard Group, Inc. is currently the company's largest shareholder with 9.3% of shares outstanding. Blackstone has outperformed the market over the past 15 years by 5.0% annually. Today, he is the author of "High Yield Landlord - the #1 ranked real estate service on Seeking Alpha. 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. -. 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. 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. Last REIT standing. As of July 2021, BREIT has a total of 1,508 real estate properties in the residential, industrial, net lease, self-storage, hotel/hospitality, retail, and office sectors located across the U.S. BREITs occupancy rates are all above 90% for almost all sectors, with the exemption of the hotels/hospitality sector which was heavily affected by the COVID-19 pandemic. In a matter of three days last week, Blackstone agreed three transactions around the globe totaling roughly $38 billion of activity. 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. A real estate private equity firm with over 20 years of successful performance, are currently looking to add a Property Accountant to their team. To be fair, BREIT is a pretty vehicle and it has a strong track record. However, they do not trade shares in a public exchange with the likes of NYSE and NASDAQ. Consider These Alternative Real Estate Investments. The purchase will give Blackstone a large-scale portfolio of high-quality, flexible real estate in some of the country's best markets. If you have an ad-blocker enabled you may be blocked from proceeding. This covers BREITs direct property investments, equity in public and private real estate-related companies, and unconsolidated investments. Large-scale transactions, such as taking publicly traded REITs private, are an effective way for it to deploy sizable amounts of its dry powder. The 28,385 square metre building is 10-storeys and was redeveloped in 2010-11 as part of the Westfield Sydney redevelopment. 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 . Certain suitability requirements must be met to be a BREIT stockholder. I wrote this article myself, and it expresses my own opinions. Learn More. It invests in real estate properties across 8 sectors and real estate debt through mortgage-backed securities and other real estate-related loans. 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Simply Self Storage, East Coast Storage Portfolio, Cactus Storage Portfolio, etc. "The impact on Blackstone depends on whether the REIT is able to stabilize its net asset value over time, or is forced to enter an extended run-off scenario, with significant asset sales and ongoing redemption backlog too early to tell, in our view," BMO Capital Markets analysts wrote in a note. 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.". 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. Notes: Class D shares dont include the upfront 1.5% sales charge at initial subscription yet. This was followed by the Class I shares, Class D shares, and then the Class T shares. Information regarding Blackstone and Blackstone Real Estate is included to provide information regarding the experience of our sponsor and its affiliates. He added that the REIT had ample cash reserves to "weather pretty much any storm." 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. To liquidate their assets, BREIT must repurchase their shares, which is not guaranteed. Clicca su Gestisci impostazioni per maggiori informazioni e per gestire le tue scelte. Their current real estate investments operate in 7 sectors: BREITs acquired assets are growing continuously. Become a magnet for investors once again and was redeveloped in 2010-11 as part of the 4 types of shares! Above shows the historical NAV price of the country 's best markets expresses my own opinions as of. Austin, Dallas/Fort Worth, and it has a portfolio of 17 operational malls! 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