Blackstone has outperformed the market over the past 15 years by 5.0% annually. Simply Self Storage, East Coast Storage Portfolio, Cactus Storage Portfolio, etc. The company will likely continue to battle this headwind until it works through its current backlog. Certain parameters from financial statements will tell you how the company managed its investments through the ups and downs of the business cycle. Learn More. This implies that the REIT was able to sell properties at a significant gain from its original purchase price. 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. With public REITs, you have much more flexibility. I wrote this article myself, and it expresses my own opinions. I think that it is inferior and yet it is a lot more expensive. Ascendas Hospitality and Hong Kong-based Gaw Capital declined to comment. That's one of, 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. 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. Mortgage REITs . BREIT is an externally-managed REIT. Join us for a 2-week free trial and get access to all my highest conviction investment ideas. However, even after the recent REIT shopping spree, Blackstone still has plenty of dry powder to continue buying real estate. Large-scale transactions, such as taking publicly traded REITs private, are an effective way for it to deploy sizable amounts of its dry powder. But they also plan to permeate the European real estate market and certain other countries. Just this week, the Blackstone Real Estate Income Trust agreed to buy an apartment portfolio comprising more than 12,600 units from Resource REITBluerock . Disclosure: I/we have a beneficial long position in the shares of CORE PORTFOLIO + RETIREMENT PORTFOLIO + INTERNATIONAL PORTFOLIO either through stock ownership, options, or other derivatives. In the . Today, he is the author of "High Yield Landlord - the #1 ranked real estate service on Seeking Alpha. BREIT had been a big growth driver for Blackstone. And apparently this is the new target. BREIT has the option to repurchase all or maybe some of the shares you request to liquidate. By Milana Vinn. Plus, the REIT has over 40% upside to NAV. 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. 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 is impossible to predict with any certainty, because last year Blackstone acquired data center REIT QTS Realty, and in 2018 it acquired hospitality REIT LaSalle Hotel Properties. The company has a market cap of $3.67 billion, a P/E ratio of 14.90 and a beta of 1.31. Clearly, that is Blackstone's view. Get them exclusively at High Yield Landlord. In 2021, BREIT raised nearly $25 billion from investors. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. At times, they might not even repurchase at all when you need the money urgently. 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 a result, it will receive about $2.7 billion in cash when the deal closes. 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. While it has steadily put that money to work, cash continues flowing into BREIT's coffers because of its growing reputation for delivering top-tier returns. Blackstone's purchase of American Campus makes student housing a fully privately held asset class in the US. And, as you can see from the metrics above, this portfolio has exhibited incredibly strong organic performance so far this year. That suggests it could make more headline-grabbing deals this year. BREIT is a hybrid REIT because it deals with both. ("Net asset value" is akin to an adjusted book value for REITs using estimated market values for their real estate. I am not receiving compensation for it (other than from Seeking Alpha). Puoi cambiare le tue preferenze in qualunque momento nella sezione Le tue impostazioni per la privacy. LONDON (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. Today, he is the author of "High Yield Landlord - the #1 ranked real estate service on Seeking Alpha. A real estate private equity firm with over 20 years of successful performance, are currently looking to add a Property Accountant to their team. And our opportunistic funds protected capital, down only 1%, so we only performed by 16% for our customers over the index. DLF's top management has been maintaining that the timing for REIT will be decided by the two joint venture partners, Pic- Reuters. 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. This is a much better management structure because the management is hired as employees of the REIT. If you want full access to our Portfolio and all our current Top Picks, feel free to join us for a 2-week free trial at High Yield Investor. The 2 main distinctions of REITs in terms of how they earn income are equity and mortgage REITs. Clicca su Gestisci impostazioni per maggiori informazioni e per gestire le tue scelte. 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). If you have an ad-blocker enabled you may be blocked from proceeding. Note that this is an investment-grade rated company with a very strong track record and it is not in any distress. 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. Managers of non-traded REITs often offer their investors limited liquidity. 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. 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. While its recently announced deals will utilize some more of that capital, additional money is likely to continue flowing into its coffers. Westfield tower at 100 Market Street, SydneyCredit:Peter Rae. 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. 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 . The $71 billion Blackstone Real Estate Income Trust (BRET) saw investor withdrawals of nearly $9.9 billion last year. I wrote this article myself, and it expresses my own opinions. Contrary to traded REITs, BREIT invests in perpetual-life REITs wherein NAV prices are valued daily or monthly with a limited liquidity period. Last week, it reached a $12.8 billion deal to acquire student housing-focused, . According to Bloomberg, investors requested to pull more than $5 billion out of Blackstone's (BX 0.97%) non-traded REIT, the Blackstone Real Estate Income Trust (or BREIT) last month. Like the BPP funds, BREIT doesn't buy fixer-uppers. That left it with $36.3 billion of dry powder. Please. SoCal Grocery Portfolio, Canarsie Plaza (NY), Bakers Center (PA), etc. BREIT's net asset value has grown to $69 billion, making it one of the largest REITs in the world. As of FY 2020, BREITs real estate debt investments consist of 194 investments in CMBS, 15 investments in RMBS, 10 corporate bond investments, and 9 real estate loans. We are the fastest-growing and best-rated stock-picking service on Seeking Alpha with 2,500+ members on board and a perfect 5/5 rating from 500+ reviews: You won't be charged a penny during the free trial, so you have nothing to lose and everything to gain. While a cheaper fair value is good news for new investors. What Blackstone's REIT Acquisition Spree Is Telling Investors, Blackstone Is Becoming a Real Estate Powerhouse, 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, With billions of dollars in dry powder across its real estate private equity funds and cash continuing to pour into its funds. 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. See here for a complete list of exchanges and delays. Investors reportedly asked to pull more than $5 billion out of its non-traded REIT last month. The stockholder distribution across the class shares is shown below. Blackstone Group has been on an aggressive REIT buying spree in the last few years. 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 would of course argue that BREIT is the better investment opportunity because BREIT is uniquely attractive for a number of reasons: Blackstone of course wants you to think that BREIT is the better opportunity because it earns fees for managing it. Since all of these common stocks are not traded in a public exchange, investors understand that their investments are not liquid. The curbs came because redemptions hit pre-set limits, rather than Blackstone setting the limits on the day. Public REITs are down 25% and many are down closer to 50% even as real estate values remained more or less intact. Verition Fund Management LLC raised its position in Blackstone Inc. ( NYSE:BX - Get Rating) by 33.2% during the third quarter, according to the company in its most recent disclosure with the SEC. Consider These Alternative Real Estate Investments. It has a strong balance sheet with mostly fixed-rate debt. EdR Student Housing Portfolio (10,610 units), Southeast MH portfolio (8,563 units), Acorn Multifamily Portfolio (8,309 units), etc. Per maggiori informazioni sulle modalit di utilizzo dei dati, consulta la nostra Informativa sulla privacy e lInformativa sui cookie. This button displays the currently selected search type. 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. But that's not due to any issues with the REIT itself. The spokesperson added that the REIT relied on a long-term fixed rate debt structure, making it resilient. And Blackstone's financial capacity to continue scooping up undervalued REITs is massive. Blackstone CEO Steve Schwarzman noted on the company's recentfourth-quarter conference callthat "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.". I have no business relationship with any company whose stock is mentioned in this article. 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. 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. As of March 17, 2021, it has a total of 112,104 stockholders. 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 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. Instead, it continues to deliver differentiated performance. Last but not least, since REITs are today priced at large discounts to fair value, they also pay a higher yield and offer a lot greater upside potential. Dividends are paid and capital gains, if any, are shared. 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%. Invest at least 75% of total assets in real estate or cash. . Blackstone told investors in a letter it would curb withdrawals from its REIT after it received redemption requests in November greater than 2% of its monthly net asset value and 5% of its quarterly net asset value. The firm owned 20,221 shares of the asset manager's stock after acquiring an additional 5,035 shares during the quarter. BREIT is a Maryland corporation founded in 2015 and started operating as a non-traded REIT in 2017. Blackstone (BX.N) limited withdrawals from its $69 billion unlisted REIT on Thursday after redemption requests hit pre-set limits . They earn income by leasing out rental spaces to clients. 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. However, it recovered by the end of 2020. To give you an example, at High Yield Landlord, we hold an international Portfolio with REITs from 6 different countries.
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