Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. The 2 main distinctions of REITs in terms of how they earn income are equity and mortgage REITs. And our opportunistic funds protected capital, down only 1%, so we only performed by 16% for our customers over the index. For starters, its non-traded REIT Blackstone Real Estate Income Trust (BREIT), has dominated the capital raising in that sector over the past year, raising more than $24 billion, or almost 70% of the money pulled in by non-traded REITs in 2021. Barclays analysts downgraded their rating of Blackstone's stock to "equal weight" from "overweight" and cut their price target to $90 from $98 on Friday. 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). This is a much better management structure because the management is hired as employees of the REIT. Florence Chong speaks to Anil Reddy You need to be a registered user to read this content With dividends reinvested, the benchmark SPDR S&P 500 ETF (ticker: SPY) lost 18.2% last . That's one of several long-term growth drivers. With public REITs, you have much more flexibility. A real estate private equity firm with over 20 years of successful performance, are currently looking to add a Property Accountant to their team. High Yield Landlord is managed by Leonberg Capital. This implies that the REIT was able to sell properties at a significant gain from its original purchase price. To make the world smarter, happier, and richer. BREIT is a REIT where shares are held by investors, but those shares aren't traded. The REIT also represented a bid to win over high net-worth investors clamoring for private market products, which they believe perform better than those that are publicly traded. Bill Bayless, ACC co-founder and CEO, said the transaction marked the culmination of a "pioneering quest to transform the student housing . They claim that, unlike public REITs, BREIT is uncorrelated with the public stock market because it is a non-listed real estate investment vehicle. The 28,385 square metre building is 10-storeys and was redeveloped in 2010-11 as part of the Westfield Sydney redevelopment. The asset manager partners with big money players like pension funds and insurance companies to provide strong returns and steady income. In July, we saw another example of this accretive capital recycling as STAG sold two properties for $82 million at a 5.2% cap rate after having purchased them several years prior at an average cap rate of 6.2%. If you have an ad-blocker enabled you may be blocked from proceeding. Tombol ini menampilkan jenis pencarian yang dipilih saat ini. 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 . Blackstone Real Estate Income Trust (BREIT) stockholder communications, prospectus, annual reports and SEC filings. Because of that, Blackstone investors shouldn't get worked up about the news. Currently, Blackstone has a market capitalization of $66.78 billion. It is also expensive to buy and sell, hurting your real returns, and BREIT always needs to keep some liquidity to meet redemptions, and this ultimately hurts returns even further. Rising interest rates weigh on real estate values because they make financing properties more expensive. More investors are entrusting it with more of their capital, giving it the funds to acquire more real estate. 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. Last week, it reached a $12.8 billion deal to acquire student housing-focusedresidential REITAmerican Campus Communities. This is why they are today two of our largest holdings in our Core Portfolio. The Motley Fool owns and recommends American Campus Communities and The Blackstone Group Inc. I don't know many asset classes that perform -- outperform indexes by 3,000 basis points. BREIT has a diverse real estate property portfolio. Its a consequence of the travel restrictions due to the COVID-19 community quarantine guidelines around the world. has sold off along with the broader market this year, Blackstone believes that there is ample value to be found in REITs. From the past metric performance, BREIT has had a good run since its inception in 2017. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. You are responsible for your own investment decisions. 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. But the better way to gauge a REITs performance is through its FFO. Ultimately, private REITs pool investors' capital and purchase various properties based on the fund's mandate. Last REIT standing. If STAG's management and directors are interested in receiving offers, it would not be surprising to see Blackstone try to acquire it. Blackstone started seeing a flood of redemption requests late last year, exceeding its limit. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. Blackstone Group has been on an aggressive REIT buying spree in the last few years. The real estate group of Blackstone, Blackstone Real Estate, is our sponsor and an affiliate of BX REIT Advisors L.L.C. Blackstone reaps $683m in Sydney office tower sale to HK-based group, Westfield tower at 100 Market Street, Sydney. 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. "It's not a surprise that you would see a deceleration in flows from individual investors when you've had this kind of market decline," Gray said. Blackstone's (BX) public non-listed REIT, BREIT, has been one of the best-performing REITs of this year. So far, its highest total net distribution (includes deductions of corresponding fees already) was Class I shares in FY 2019. I am not receiving compensation for it (other than from Seeking Alpha). BREIT also invests in non-distressed public and private real estate debt such as: With the expertise of their investment advisors, BREIT uses leverage through financing to multiply their funds for the increased potential of investment returns. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Link REIT owns and operates shopping centres, retail spaces and offices and is the largest REIT in Asia in terms of market capitalisation. We do not believe it is a good idea to buy a REIT simply because it looks like an attractive buyout prospect for big-money asset managers and private real estate funds. 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. To be fair, BREIT is a pretty vehicle and it has a strong track record. Under the terms of the agreement, B REIT will acquire the REIT 's portfolio of multifamily, garden-style assets comprised of 42 apartment communities totaling more than 12,600 units. Blackstone's purchase of American Campus makes student housing a fully privately held asset class in the US. (the "Adviser"). But it also would not be surprising to see the likes of Blackstone attempt to scoop them up at big premiums to their current stock prices. 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). You are responsible for your own investment decisions. Their recent investments are, namely, in residential, industrial, net lease, hospitality (leisure market), self-storage, retail, and office. The $71 billion Blackstone Real Estate Income Trust (BRET) saw investor withdrawals of nearly $9.9 billion last year. 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). Blackstone is also active in credit, infrastructure, hedge funds, insurance, secondaries, and growth . It only fulfilled about a quarter of those redemptions because it hit its 2% monthly limit. Do your own research or seek the advice of a qualified professional. Blackstone Inc. will purchase PS Business Parks, Inc. (NYSE:PSB) in an all-cash deal valued at approximately $7.6 billion, the two companies announced April 25. The deal will add a large-scale portfolio of business park, office, and industrial assets to Blackstone's burgeoning real estate portfolio. Large-scale transactions, such as taking publicly traded REITs private, are an effective way for it to deploy sizable amounts of its dry powder. With 8.1% and 4.3% of the shares outstanding respectively, BlackRock, Inc. and Blackstone Inc. are the second and third largest shareholders. 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. Multifamily REIT Preferred Apartment Communities announced . However, net losses have been incurred since 2017 which can be attributed to the real estate debt portfolio. There are also selling commissions upfront that can amount up to 3.5% and stockholder servicing fees that can add up to 0.85% each year. New York, June 22, 2021 - Blackstone Real Estate Income Trust, Inc. ("BREIT") announced today that it has entered into a definitive agreement to acquire Home Partners of America ("HPA"), valuing the company at $6.0 billion. Managing more than $975 billion, the company invests money for wealthy . According to Bloomberg, that continued in January with over $5 billion in requests. DISCLAIMER: Jussi Askola is not a Registered Investment Advisor or Financial Planner. 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. Invest at least 75% of total assets in real estate or cash. Like the BPP funds, BREIT doesn't buy fixer-uppers. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. As stable becomes sexy in Asia's real estate markets, Blackstone is teaming up with the family controlling the sponsor of a Singapore-listed REIT for a S$700.3 million ($524.5 million) offer to buy out the industrial real estate trust. Having invested in data centres in the US and Europe, Blackstone has eyes on Asia-Pacific - starting with India. 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 . Bellagio (NV), MGM Grand (NV), & Mandalay Bay (NV). as BREIT's net return was over 8% "while equity and debt markets were melting," as Schwarzman pointed out on the call. Mortgage REITs . Does the Stock Market Have You Down? Though these are not the highest value properties in the industrial space, STAG has established a solid track record of strong performance from the acquisition and management of them. As of June 30, 2021, their total properties were 1,463. It leads to "growth at all costs", which hurts returns, and this is why such externally-managed REITs are disliked by investors. The stockholder distribution across the class shares is shown below. BREIT has the authority to issue a total of 10,100,000,000 shares. 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. 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. Image courtesy of Bluerock Residential Growth REIT. If you can't get your money back, does the "paper valuation" then have any meaning? Blackstone Group(BX 0.97%) is back in the headlines again this week with another multi-billion-dollar purchase of a real estate investment trust (REIT). . HPA has a portfolio of over 17,000 homes throughout the U.S. 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. I have no business relationship with any company whose stock is mentioned in this article. 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. NEW YORK, Dec 1 (Reuters) - (This Dec. 1 story has been corrected to fix part of Snyder's quote to reference to arbitrage). Join us for a 2-week free trial and get access to all my highest conviction investment ideas. If investors want to buy BREIT shares, they must have: BREIT has 4 types of share classes which differ in how the investors will be charged. Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. This time it's buyingPS Business Parks(PSB) for $7.6 billion. The asset management behemoth boasts roughly $50 billion in dry powder capital earmarked for global real estate, including a new real estate fund with over $24 billion in commitments from investors so far. Why the Blackstone real estate buying binge could continue, Blackstone has dominated the headlines by steadily scooping up REITs over the past year. Blackstone (BX.N) limited withdrawals from its $69 billion unlisted REIT on Thursday after redemption requests hit pre-set limits . 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. 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. EmeryTech Office (CA) & Coleman Highline Office. Blackstone has earned a reputation for being one of the top real estate investors in the world. 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. Is this happening to you frequently? However, it recovered by the end of 2020 and soared in the first half of 2021. SoCal Grocery Portfolio, Canarsie Plaza (NY), Bakers Center (PA), etc. Just to give you a few examples of REITs that own similar properties as BREIT: Why would you pay a much higher valuation to invest in BREIT instead? The spokesperson added that the REIT relied on a long-term fixed rate debt structure, making it resilient. 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