Blackstone has grown a real estate investment trust into a $70 billion behemoth, but market tailwinds could dampen other real estate activity and present an uphill road.
Blackstone Real Estate Income Trust Bloomberg Inflows Slowing, Redemptions Rising reportRising interest rates are hampering the ability to make acquisitions, with wealth advisers warning clients against illiquid investments.
In the third quarter, BREIT had net flows of $1.2 billion, down from $7.7 billion in the same period last year. Investors added about 50% less new money while withdrawals increased 15x.
BREIT has a certain threshold on the amount that an investor can withdraw. If you reach these thresholds, you may need to increase your limits or limit your withdrawals.
Many of Blackstone’s top executives have a personal interest in the success of BREIT. In the past three months, president John Gray has poured $100 million into the fund, a person close to the company told the outlet, and CEO Stephen Schwartzman has done the same.
Nadeem Meghji, head of Blackstone Real Estate Americas, told the outlet that BREIT is built to withstand challenges by investing heavily in rental housing. warehouse properties in the sun belt.
“This is exactly what I want to own in an environment like today,” Megzi told Bloomberg in a statement.
But asset growth is not even. Demand for warehouses, the pandemic’s sweetheart sector, has cooled slightly in recent months. Rents in the multifamily market have surged incredibly fast during the pandemic, but renters willing to move back home or live with roommates to avoid expensive monthly payments These increases have slowed amid pushback from people.
2nd Quarter onwards, Gray Praising BREIT, he said: It “exemplifies the strength of our focus strategy.” A major transaction in recent years includes the acquisition of American Campus Community, a student housing company. $12.8 billion and data center company QTS Realty Trust for $10 billion.
BREIT may be in a slightly weaker period than in recent quarters, but it remains a strong performer in the REIT sector. In his first nine months of the year, BREIT boasted his 9.3% net return, while listed REITs fell 30% in value.
— Holden Walter Warner