BREIT records best returns in 6 months

Blackstone’s beleaguered real estate investment trust saw brighter days in February. 

Blackstone Real Estate Income Trust rode advantageous positions amid rising rates to offset a decline in property values and report its largest monthly total return in six months, according to Bloomberg.

BREIT’s lowest-fee share class posted an 0.7 percent total return in February. The trailing 12-month returns were 5.7 percent, Blackstone reported this week. That still pales in comparison to the return from the share class in older times, when it recorded an 8.4 percent gain for all of 2022 and a humongous 30.2 percent gain in 2021.

Higher rents helped pace last month’s gains for the fund, which is popular with wealthy individual investors. The fund’s net asset value is $70.5 billion, while it has $14 billion in liquidity for possible acquisitions.

It’s been a whirlwind few months for BREIT. Earlier this month, the fund limited withdrawals for the fourth consecutive period, in which it said redemption requests were slowing after an initial rush to pull money out. January saw investors tried to withdraw $3.9 billion and the firm fulfill only $1.4 billion, but the total requested for withdrawal fell month over month by 26 percent.

Prior to closing the gates, BREIT had been a vehicle of unparalleled success for Blackstone. The fund has been on a purchasing spree since launching in 2017, buying up assets including apartment buildings and student housing; the firm has said the majority of its holdings are in housing and logistics in the Sun Belt. Among its major acquisitions were American Campus Communities and data center firm QTS Realty Trust.

Blackstone started limiting redemptions in the fall after a spring and summer selloff in Asia led investors in those property markets to start backing away. 

The fund received a big boost in January when the University of California provided a $4 billion endowment. The common equity commitment is essentially locked in for six years, placed into a venture featuring a $1 billion commitment from Blackstone itself.

The university last month added $500 million to its commitment.

— Holden Walter-Warner