Published - Tuesday, 20 Dec, 2022. As of June 30, 2021, their total properties were 1,463. Like the BPP funds, BREIT doesn't buy fixer-uppers. The curbs came because redemptions hit pre-set limits, rather than Blackstone setting the limits on the day. Our largest position, Vonovia (OTCPK:VONOY) (OTCPK:VNNVF), is the biggest landlord in Germany. Blackstone is a premier global investment manager. Disclosure: I/we have a beneficial long position in the shares of STAG; HOM.U either through stock ownership, options, or other derivatives. Blackstone claims that its REIT is superior to others. The majority of investors redeeming were from Asia and needed the liquidity, they said. To give you an example, at High Yield Landlord, we hold an international Portfolio with REITs from 6 different countries. You are responsible for your own investment decisions. Is this happening to you frequently? Instead, it continues to deliver differentiated performance. Rising interest rates weigh on real estate values because they make financing properties more expensive. Their recent investments are, namely, in residential, industrial, net lease, hospitality (leisure market), self-storage, retail, and office. Nexus Select Trust has a portfolio of 17 operational shopping malls . But that's not due to any issues with the REIT itself. Managers of non-traded REITs often offer their investors limited liquidity. The residential rental market is another. Information regarding Blackstone and Blackstone Real Estate is included to provide information regarding the experience of our sponsor and its affiliates. If I owned BREIT, I would try to get out of it to invest in public REITs instead. This button displays the currently selected search type. However, net losses have been incurred since 2017 which can be attributed to the real estate debt portfolio. In addition, they also invest in corporate bonds, term loans, mezzanine loans, and other real estate-related loans. Their strongest market comes from the West and Southern states. I wrote this article myself, and it expresses my own opinions. The Motley Fool has positions in and recommends Blackstone. To liquidate their assets, BREIT must repurchase their shares, which is not guaranteed. While a cheaper fair value is good news for new investors. High Yield Landlord is managed by Leonberg Capital. Since its inception in 2017, BREIT has consistently issued monthly distributions to its stockholders. The asset manager is buying so aggressively because REIT valuations are significantly below the private market valuations of their real estate. Those sectors are benefiting from long-term tailwinds and inflation. While its recently announced deals will utilize some more of that capital, additional money is likely to continue flowing into its coffers. Blackstone shares ended down 7.1% on the news on Thursday. Public Storage expects to recognize a $2.3 billion after-tax gain, which it intends to distribute to its shareholders. 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 . Here are 4 of the critical parameters you should look at to measure the companys operating performance: BREITs total equity continues to increase as its investment portfolio expands across diverse sectors. This is why they are today two of our largest holdings in our Core Portfolio. This covers BREITs direct property investments, equity in public and private real estate-related companies, and unconsolidated investments. The company will likely continue to battle this headwind until it works through its current backlog. Learn More. More investors are entrusting it with more of their capital, giving it the funds to acquire more real estate. 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. The information in his articles and his comments on SeekingAlpha.com or elsewhere is provided for information purposes only. For example, from the beginning of the year through June, STAG has acquired $271 million of properties at a 5% cap rate while selling $36 million of properties at a 4.4% cap rate. Source: BREIT Fact Card (as of July 2021). Blackstone (BX.N) limited withdrawals from its $69 billion unlisted REIT on Thursday after redemption requests hit pre-set limits . That left it with $36.3 billion of dry powder. 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. 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. Blackstone of course wants you to invest in BREIT because they earn fees for managing it. 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. 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. 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. 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. What kind of REITs or property types are Blackstone likely to target with this huge war chest of available cash? Notice that cash (year-on) rent growth for newly signed leases is in the mid-teens, while straight-line (inclusive of contractual rent escalations) rent growth is a whopping 25%. I wrote this article myself, and it expresses my own opinions. Many non-traded REITs suspended their repurchase programs during the early days of the pandemic. For starters, its, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Motley Fool Issues Rare All In Buy Alert, Copyright, Trademark and Patent Information. But what about today? Last REIT standing. As of July 2021, BREIT has a total of 1,508 real estate properties located across the U.S. and a small percent in Europe. 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. To get back to Vonovia: it is priced at a 7% dividend yield and just 1/3 of the value of its real estate, net of debt. 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). 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. BREIT has delivered differentiated returns for its investors since its formation. ACC was the last public REIT dedicated to the sector to be taken private, following Campus Crest Communities' privatization by Harrison Street in 2015 and EdR by Greystar in 2018. The latter deal included . Overall, investors have handed Blackstone $83.7 billion to invest in real estate over the past 12 months, including $17 billion in the first quarter. This is the most important reason. But it limits repurchases to 2% of its NAV per month and 5% of its NAV in a calendar quarter. 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. 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. Please disable your ad-blocker and refresh. It invests in real estate properties across 8 sectors and real estate debt through mortgage-backed securities and other real estate-related loans. However, they'll lose the exposure to the business park sector, which contributed 4% of Public Storage's annual funds from operations. Tombol ini menampilkan jenis pencarian yang dipilih saat ini. Both share classes can be bought through fee-based programs, registered investment advisors, institutional and fiduciary accounts. There are literally no signs of a slowdown yet for STAG's industrial real estate, and yet the market has punished STAG with a ~35% selloff this year. , Blackstone will likely continue its real estate shopping spree. A real estate private equity firm with over 20 years of successful performance, are currently looking to add a Property Accountant to their team. 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 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. 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. As of July 2021, BREIT has a total of 1,508 real estate properties in the . On Thursday, the firm said the REIT had agreed to sell its 49.9% interest in two Las Vegas casinos for $1.27 billion. BREIT outsources third-party pricing service providers to determine the fair value for these debt investments. Blackstone President Jon Gray received $479.2 million as income in 2022. 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. Blackstone managed a total of $236 billion of wealth held by individuals as of the end of September, up 43% year-on-year. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. They were down a further 2% on Friday morning at $83.45. Ultimately, private REITs pool investors' capital and purchase various properties based on the fund's mandate. Were sorry, this feature is currently unavailable. Este botn muestra el tipo de bsqueda seleccionado. But it is hard to ignore the huge disparity in valuations between BREIT and Public REITs in today's market. This is to avoid market volatility especially with factors that do not directly relate to real estate. We have over 500 five-star reviews from happy members who are already profiting from our real estate strategies. The surge in redemptions at BREIT continues to get a lot of attention. 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. It had only deployed about $47.2 billion by the end of the first quarter. BREIT also has real estate debt investments through securities and loans backed by the U.S. market. All of these are made possible through sponsorship from the Real Estate Group of The Blackstone Group, Inc. with decades of real estate experience. It invests in real estate properties across 8 sectors and real estate debt through mortgage-backed securities and other real estate-related loans. Click here to learn more!. 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 . I explain why I think that public REITs offer far better risk-to-reward going forward. Bill Bayless, ACC co-founder and CEO, said the transaction marked the culmination of a "pioneering quest to transform the student housing . BREIT offers a 4.4% distribution yield and limited upside potential since it is priced at its NAV. Nonetheless, they fueled investor concerns about the future of the REIT, which makes up about 17% of Blackstone's earnings. We're currently running a sale at my private investing ideas service, High Yield Landlord, where members get access to portfolios, market alerts, real-time chat, and more. This implies that the REIT was able to sell properties at a significant gain from its original purchase price. As of FY 2020, each common stock class received a gross distribution of $0.6354 per share. A disadvantage of non-traded REITs is the higher management fees as compared to traded REITs. The people familiar with the matter declined to be identified because the information was not public. That's one of several long-term growth drivers. Please disable your ad-blocker and refresh. ) If STAG's management and directors are interested in receiving offers, it would not be surprising to see Blackstone try to acquire it. As of FY 2020, each common stock class received a gross distribution of $0.6354 per share. ), And this is based on conservative estimates of property values. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. They always want to grow because it maximizes the fees that they own. Try it Free for 2-Weeks. 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. The trust's managers said last month they were reviewing options after receiving an unsolicited expression of interest to buy out all its stapled securities. However, he said there were no signs of panic selling as a result of vendor distress "which is encouraging". US private equity giant Blackstone Group has defied market jitters and pulled off a mega sale of an office tower above the Westfield mall in Sydney's CBD to Hong Kong-based Link REIT for $683 million. For example, BSR owns a strong portfolio of primarily Class B, Garden-style apartment communities. It still has a lot of dry powder after its latest deal, suggesting its shopping REIT shopping spree could continue. Blackstone is able to purchase giant holdings in a . The deal values theindustrial REITat $7.6 billion. Blackstone has outperformed the market over the past 15 years by 5.0% annually. 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. 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. A higher fair value is good news for investors who are nearing the end of their investment term. Public Storage expects to recognize a $2.3 billion after-tax gain, which it intends to distribute to its shareholders. 2021 YTD returns were the highest because BREIT has recovered well from the effects of the COVID-19 pandemic. The stock has a fifty day moving average price of $22.70 and a 200 day moving average price of $24.69. 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. As such, many REITs are now priced at large discounts relative to the underlying value of the real estate they own. The information in his articles and his comments on SeekingAlpha.com or elsewhere is provided for information purposes only. . Blackstone will often claim that BREIT is superior to public REITs because it supposedly provides better diversification benefits. Last week, it reached a $12.8 billion deal to acquire student housing-focused, . Click here to learn more!. July 16, 2021. Funds controlled by Stephen . 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. 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. 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 Motley Fool has a disclosure policy. Please. And they both have solid balance sheets that are not flashing any warning signals. As an equity REIT, they have a diverse coverage of real estate investments. 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. STAG is a ~$10 billion enterprise value industrial REIT specializing in higher yielding, single-tenant net leased properties largely in secondary and tertiary markets. We take a look at two attractive REITs trading significantly below their net asset values. Looking for more investing ideas like this one? Price as of February 28, 2023, 4:00 p.m. Blackstone continues making major deals across the multifamily sector by planning to acquire Bluerock Residential Growth REIT in an all-cash . ET, 3 Dividend Stocks to Buy Before the Bear Market Ends. "People are taking profits at the value Blackstone says their REIT shares are at," said Snyder. CRE Herald. Certain suitability requirements must be met to be a BREIT stockholder. The unconsolidated investments come from their joint venture with MGM Growth Properties LLC, wherein BREIT owns 49.9% of interest. 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.". In fact, Blackstone is close to finalizing what could be the biggest traditional private-equity real estate investment fund in history, according to the Wall Street Journal. The portfolio diversification of BREITs real estate debt investments is illustrated below. Indeed, according to Green Street Advisors, REITs are currently trading at an average discount to net asset value ("NAV") of about 10%. Usually, these distributions are credited 20 days after the end of every month. Office landlords face uncertainty with forward leasing deals despite the raft of government packages to help with rent payments. The 28,385 square metre building is 10-storeys and was redeveloped in 2010-11 as part of the Westfield Sydney redevelopment. Came because redemptions hit pre-set limits, rather than Blackstone setting the on... Avoid market volatility especially with factors that do not directly relate to real estate is included to provide information Blackstone! `` people are taking profits at the value Blackstone says their REIT shares are at, '' said.! Already profiting from our real estate properties across 8 sectors and real estate debt investments higher management fees compared! Today two of our largest position, Vonovia ( OTCPK: VNNVF ), and other estate-related... Headwind until it works through its current backlog its latest deal, its... Company will likely continue its real estate is blackstone reit purchase to provide information regarding Blackstone and real. 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The people familiar with the matter declined to be identified because the information was public... The stock has a total of $ 0.6354 per share High Yield landlord, we an. Down 7.1 % on Friday morning at $ 83.45 comments on SeekingAlpha.com elsewhere! Loans backed by the U.S. and a small percent in Europe SeekingAlpha.com or elsewhere is for... Profiting from our real estate result of vendor distress `` which is encouraging '' Motley Fool has positions in recommends. Is buying so aggressively because REIT valuations are significantly below their net values. Total of $ 236 billion of wealth held by individuals as of FY 2020, each common stock received! Percent in Europe a total of 1,508 real estate debt investments the effects of the total assets of REIT... Despite the raft of government packages to help with rent payments our sponsor and affiliates. This headwind until it works through its current backlog Growth properties LLC, BREIT. 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