The Real Deal New York

Blackstone triples fundraising goal for REIT

Firm now wants to raise $15B as opposed to initial $5B
June 12, 2018 03:45PM

Blackstone CEO Jonathan Gray (Credit: iStock)

Blackstone Group is tripling its fundraising goal for the real estate investment trust it started last year.

The company said in its initial filing with the U.S. Securities and Exchange Commission that it planned to raise $5 billion for Blackstone Real Estate Income Trust but now says it will raise an additional $10 billion on top of this, according to the Wall Street Journal. The change is due to how quickly the REIT has been selling its shares so far.

The REIT has used the proceeds and debt to buy $8 billion worth of assets. These include more than 100 properties, largely made up of industrial real estate and rental apartment buildings.

Blackstone’s REIT is nontraded, meaning it is not bought and sold in the stock market. Investors generally hold onto them for a long time and then cash out when the company gets acquired or does its initial public offering.

The company entered the REIT game last year, when the industry was struggling to deal with bad publicity and high upfront fees. Other companies are now planning to launch nontraded REITs as well, including Starwood Capital Group, Oaktree Capital Management LP and Nuveen LLC.

Blackstone offers much lower management fees than other companies at just 1.25 percent. [WSJ] – Eddie Small