Blackstone’s
$68 billion retail-oriented real estate fund limited withdrawals by investors for the ninth consecutive month in July as it continued to face large requests to cash out.
The Blackstone Real Estate Income Trust, known as Breit, received $3.7 billion of redemption requests in July and paid out 34% of that, or $1.3 billion, to investors, according to a notice posted on the Breit website Tuesday morning. Breit limits monthly redemptions to 2% of its net asset value and 5% per quarter.
The redemption requests were down slightly from $3.8 billion in June and were the lowest so far this year. Redemption requests peaked at $5.3 billion in January, but remain high even though Breit has paid out $9.4 billion to investors since limits on withdrawals were put in place in November.
Breit said Tuesday that a “shareholder who began submitting repurchase requests when proration began has received approximately 94% of their money back and the semi-liquid structure is working as intended.” Breit shares aren’t publicly traded, so investors rely on Breit to fund redemptions.
The limits structure is designed to prevent wholesale asset sales by Breit in the face of redemption requests and protect its investor base. Breit holds a portfolio with $122 billion in assets, most of them in the Sunbelt, that is focused on apartments and warehouses, two of the strongest sectors of the commercial real estate market.
Those assets can be difficult to sell quickly in response to investors’ requests for cash.
Breit said Tuesday that it has experienced 7%-plus cash flow growth in the first six months of the year. The fund has returned 1.3% year to date through June based on its largest share class. It has returned 11.7% annualized since inception in 2017.
Blackstone stock (ticker: BX) was up 0.2% Tuesday at $104.96. The shares have risen over 40% this year but remain well below their peak of about $150 in late 2021.
Breit is Blackstone’s flagship retail product and grew rapidly in 2021 and part of 2022 before flattening out as withdrawal requests accelerated in late 2022.
Corrections & Amplifications: Blackstone’s ticker symbol is BX. An earlier version of this article incorrectly said it was BR.
Write to Andrew Bary at [email protected]
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