BREIT limits withdrawals for fourth straight month

Redemption requests slowed at $71B fund since initial rush

Blackstone president Jon Gray
Blackstone president Jon Gray (Blackstone, Illustration by The Real Deal with Getty)

Redemption requests from uneasy investors have slowed for Blackstone Group’s real estate investment trust, but the fund is keeping a tight fist on withdrawals.

The $71 billion fund limited withdrawals for the fourth straight month in February as it addresses a backlog of investor requests, according to a company letter reported by Bloomberg

Investors last month tried withdrawing a cumulative $3.9 billion from the fund, exceeding the monthly limit of 2 percent of BREIT’s net asset value. Blackstone fulfilled roughly 35 percent of the requests, or $1.4 billion.

Redemption requests are easing, however, as a large investment and overall belief in the fund — which has delivered a 12.3 percent annualized net return since its 2017 origin — set the REIT straight. Withdrawal requests dropped 26 percent from January to February, easing a backlog that formed as BREIT closed the gates.

As of January, trailing 12-month returns for the fund were 6.1 percent for one of BREIT’s most popular share classes. The share class gained 8.4 percent in 2022 and 30.2 percent in 2021, respectively.

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BREIT had been an area of strength for Blackstone prior until recent months, snapping up apartment buildings and student housing. Among its recent major purchases were American Campus Communities and data center firm QTS Realty Trust.

Blackstone initially limited redemptions from its fund in the fall, sparking concerns about the fund and others like it. The limit had its origins in a spring and summer selloff in Asia, when investors started pulling out as their own property markets faltered.

The University of California in January provided a boost to the fund in the form of a $4 billion endowment. The university’s common equity commitment is effectively locked in for six years, put into a venture that included a $1 billion commitment from Blackstone.

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

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