Blackstone’s real estate investment trust turned the tap back on last month for investors after a year in retreat.
Blackstone Real Estate Income Trust in February fulfilled all of its redemption requests from investors, Blackstone’s co-head of real estate Nadeem Meghji told Bloomberg. It was the first month without BREIT restricting withdrawals since 2022.
The $60 billion REIT stopped fulfilling 100 percent of redemption requests in November 2022 after investor pressure for liquidity grew too strong amid a capsizing commercial property market. BREIT permits withdrawals of up to 2 percent of the fund’s net asset value monthly, or 5 percent each quarter.
While the commercial market remains murky, transactions are beginning to return and the Federal Reserve appears poised to stop its regular rate hikes of recent months before possibly cutting interest rates later this year.
In turn, investors seem to be less concerned about getting their hands back on cash. Last month, investors requested to redeem $961 million from BREIT, according to a shareholder letter. Bloomberg reported that’s down 26 percent from January and 83 percent from a peak 13 months ago.
The challenging cycle for BREIT began in 2022, when a selloff in Asia prompted an investor retreat. Investors began requesting redemptions in large swaths, forcing BREIT to close the metaphorical gates.
Things began looking up last January, when the University of California provided a $4 billion endowment in the form of a common equity commitment with a six-year lock; Blackstone committed $1 billion of its own funds to the transaction.
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BREIT, which Blackstone launched in 2017, has also shifted its property holdings. Much of the REIT’s portfolio is focused on the multifamily market, industrial real estate and data centers, particularly in the Sun Belt, while it has slashed exposure to commodity offices and malls.
BREIT made a big move in January, teaming with Blackstone Real Estate Partners X to acquire major single-family rental landlord Tricon Residential for $3.5 billion. BREIT is keeping an 11 percent ownership stake in Tricon following the deal’s closing, expected in the second quarter.