Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. That was almost 70% of all the capital raised by non-traded REITs that year. By Milana Vinn. Verition Fund Management LLC raised its position in Blackstone Inc. ( NYSE:BX - Get Rating) by 33.2% during the third quarter, according to the company in its most recent disclosure with the SEC. The company reports its financial statements and regular updates through SEC filings for public reference. Blackstone is a premier global investment manager. Since inception date to July 31, 2021, total returns (without initial sales charge fees) were between 10% 11% across all types of share classes. While its recently announced deals will utilize some more of that capital, additional money is likely to continue flowing into its coffers. Managing more than $975 billion, the company invests money for wealthy . The $71 billion Blackstone Real Estate Income Trust (BRET) saw investor withdrawals of nearly $9.9 billion last year. When expanded it provides a list of search options that will switch the search inputs to match the current selection. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. HPA has a portfolio of over 17,000 homes throughout the U.S. KentWeakley. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. These properties are overwhelmingly concentrated in Texas, especially Austin, Dallas/Fort Worth, and Houston. Many investors in the REIT are concerned that Blackstone has been slow to adjust the vehicle's valuation to that of publicly traded REITs that have taken a hit amid rising interest rates, a source close to the fund said. Image courtesy of Bluerock Residential Growth REIT. Certain parameters from financial statements will tell you how the company managed its investments through the ups and downs of the business cycle. The index is down 17%, we were up 2.3%. As of July 2021, BREIT has a total of 1,508 real estate properties in the . This is to avoid market volatility especially with factors that do not directly relate to real estate. Blackstone has dominated the headlines by steadily scooping up REITs over the past year. It invests in real estate properties across 8 sectors and real estate debt through mortgage-backed securities and other real estate-related loans. So far, its highest total net distribution (includes deductions of corresponding fees already) was Class I shares in FY 2019. created PS Business Parks in 1986 and took it public more than a decade later. It only fulfilled about a quarter of those redemptions because it hit its 2% monthly limit. And others could be selling at what they believe is a near-term peak in pricing for private real estate values, which have yet to see the same pricing correction as publicly traded REITs. Please disable your ad-blocker and refresh. ) More investors are entrusting it with more of their capital, giving it the funds to acquire more real estate. Este botn muestra el tipo de bsqueda seleccionado. As a result, it will receive about $2.7 billion in cash when the deal closes. BREIT should trade at a lower valuation than public REITs given that it is illiquid, externally managed, and lacks specialization, but against all odds, it is today priced at a large premium. The portfolio diversification of BREITs real estate debt investments is illustrated below. Please be aware of the risks associated with these stocks. Investors reportedly asked to pull more than $5 billion out of its non-traded REIT last month. Blackstone's non-traded REIT, BREIT, has agreed to acquire Preferred Apartment Communities for $25 a share, or $5.8 billion. BREIT has the authority to issue a total of 10,100,000,000 shares. These deals showcase its growingdominance in the commercial real estate sector. ("Net asset value" is akin to an adjusted book value for REITs using estimated market values for their real estate. The majority of investors redeeming were from Asia and needed the liquidity, they said. BREIT is a SEC-registered REIT since 2017. Blackstone (BX.N) limited withdrawals from its $69 billion unlisted REIT on Thursday after redemption requests hit pre-set limits . To give you an example, at High Yield Landlord, we hold an international Portfolio with REITs from 6 different countries. Blackstone managed a total of $236 billion of wealth held by individuals as of the end of September, up 43% year-on-year. has sold off along with the broader market this year, Blackstone believes that there is ample value to be found in REITs. "People are taking profits at the value Blackstone says their REIT shares are at," said Snyder. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. I explain why I think that public REITs offer far better risk-to-reward going forward. Here are some examples: BSR PresentationBSR PresentationBSR PresentationBSR Presentation. Is It a Buy Right Now? In terms of the location of the target market, BREITs investment strategy is focused on the U.S. market. Were sorry, this feature is currently unavailable. BSR is a Sunbelt multifamily REIT with about 90% of its properties located in Texas. The REIT turmoil is a setback for two of Blackstone's strategies that helped it become the world's biggest alternative asset manager with $951 billion in assets: real estate investing and attracting high net-worth individuals. Nexus Select Trust has a portfolio of 17 operational shopping malls . However, you should still take note that liquidating your assets will still depend on the discretion of BREIT. Looking for more investing ideas like this one? Ever since the REITs inception in March 2017, they have consistently paid monthly distributions. Before that, it struck agreements to acquire three apartment REITs for a combined $13.1 billion, an industrial REIT for $3.1 billion, and a data center REIT for $10 billion. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. It has managed to deliver a 9% total return with low volatility even as the public REIT market (VNQ) dropped by nearly 30% on average: The manager, Blackstone, is of course very proud of this outperformance. They claim that, unlike public REITs, BREIT is uncorrelated with the public stock market because it is a non-listed real estate investment vehicle. By 2030, the institutions may hold some 7.6 million homes, or more than 40% of all single-family rentals on the market, according to the 2022 forecast by MetLife Investment Management. Jupiter 12 Industrial Portfolio, Canyon Industrial Portfolio, Meridian Industrial Properties, etc. , Blackstone will likely continue its real estate shopping spree. Nonetheless, they fueled investor concerns about the future of the REIT, which makes up about 17% of Blackstone's earnings. In the . Raven Select Service Portfolio, Hyatt Regency Atlanta (GA), JW Marriott San Antonio Hill Resort (TX), etc. Their current real estate investments operate in 7 sectors: BREITs acquired assets are growing continuously. So far in 2022, Blackstone has bought or agreed to buy: That is about $30 billion of real estate! As such, many REITs are now priced at large discounts relative to the underlying value of the real estate they own. Focusing on the common shares, BREIT has a total of 112,104 holders across the 4 types of class shares as of March 17, 2021. Having invested in data centres in the US and Europe, Blackstone has eyes on Asia-Pacific - starting with India. This means that there is an external asset manager, in this case, Blackstone, that takes care of the management in exchange for fees. Since its inception in 2017, BREIT has consistently issued monthly distributions to its stockholders. July 16, 2021. Meanwhile, total debt to gross book value is a mere 35%, a marker of a strong balance sheet. For FY 2020, Class I shares were still the highest ($0.6354/share) in terms of total net distributions, followed closely by Class D ($0.608/share). These cash reserves totaled $2.7 billion as of the end of October, according to its prospectus. Alex Snyder, a portfolio manager at CenterSquare Investment Management LLC in Philadelphia, said the arbitrage between the value Blackstone has assigned to its real estate portfolio and the value of publicly traded REITs caught the eye of investors. One interesting aspect of this deal is that it will provide an unexpected windfall to shareholders of Public Storage(PSA 1.26%). The surge in redemptions at BREIT continues to get a lot of attention. This was followed by the Class I shares, Class D shares, and then the Class T shares. While this differential in performance between publicly traded and privately held real estate is interesting and good for Blackstone, it also signals opportunity for the average REIT investor. Do your own research or seek the advice of a qualified professional. I wrote this article myself, and it expresses my own opinions. Jussi is also the President of Leonberg Capital - a value-oriented investment boutique specializing in mispriced real estate securities often trading at high discounts to NAV and excessive yields. Despite the pandemic, they acquired worth $10.5B of real estate properties in the multifamily, industrial, and net lease sectors in 2020. Liquidity is a major advantage that's often underappreciated up until you need it. Blackstone launched the REIT in 2017, piggybacking off the success of its real estate empire, which had by then outgrown its private equity business. Ultimately, private REITs pool investors' capital and purchase various properties based on the fund's mandate. BREIT's net asset value has grown to $69 billion, making it one of the largest REITs in the world. Global investment firm Blackstone-sponsored Nexus Select Trust has filed the draft paper with market regulator Sebi to launch India's first public issue of retail REIT to raise around US$ 500 million (about Rs 4,000 crore), sources said. For the first half of 2021, the NAV price soared high with Class S shares at the top values at $12.92/share (July 2021). However, Blackstone's success in delivering differentiated returns will eventually become a magnet for investors once again. If you have an ad-blocker enabled you may be blocked from proceeding. Simply Self Storage, East Coast Storage Portfolio, Cactus Storage Portfolio, etc. Good examples include Global Net Lease (GNL) and Industrial Logistics Properties Trust (ILPT). Let's take a look at two potential buyout targets for Blackstone in these property sectors. Blackstone Inc. will purchase PS Business Parks, Inc. (NYSE:PSB) in an all-cash deal valued at approximately $7.6 billion, the two companies announced April 25. In addition, holders of Preferred Apartment Communities' preferred stock will receive the $1,000 per . This means you can buy real estate at 50 cents on the dollar through the public market. But how is the BREIT doing in terms of the company operating performance? Credit Suisse analysts wrote in a note that they expected the REIT's woes to weigh on Blackstone's fee-related earnings and assets under management. And apparently this is the new target. Blackstone Group (BX 1.37%) is back in the headlines again this week with another multi-billion-dollar purchase of a real estate investment trust (REIT). Deutsche Bank analyst Carlo Santarelli was sufficiently impressed with the fourth-quarter numbers from two casino-oriented real estate investment trusts (REITs) that he reiterated "Buy" ratings on each. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. While it has steadily put that money to work, cash continues flowing into BREIT's coffers because of its growing reputation for delivering top-tier returns. The general trend of NAV prices for all class shares was increasing until a sudden drop occurred in the first quarter of 2020 during the onset of the COVID-19 pandemic. As a mortgage REIT, they have real estate debt investments through commercial and residential mortgage-backed securities. That's one of, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Motley Fool Issues Rare All In Buy Alert, Copyright, Trademark and Patent Information. Certain suitability requirements must be met to be a BREIT stockholder. While they will be a headwind for Blackstone's growth in the near term as the company works through its backlog, they aren't due to any issues with that investment vehicle. The industry leader for online information for tax, accounting and finance professionals. Disclosure: I/we have a beneficial long position in the shares of CORE PORTFOLIO + RETIREMENT PORTFOLIO + INTERNATIONAL PORTFOLIO either through stock ownership, options, or other derivatives. The continued surge in such requests has kept the pressure on Blackstone's stock price. Its president Jonathan Gray was elevated and made successor to Chief Executive Stephen Schwarzman as a result of his success in property investing. JOIN THE CONVERSATION. A Blackstone spokesperson declined to comment on how the New York-based firm calculates the valuation of its REIT, but said its portfolio was concentrated in rental housing and logistics in the southern and western United States that have short duration leases and rents outpacing inflation. Instead, it continues to deliver differentiated performance. Dividends are paid and capital gains, if any, are shared. Since all of these common stocks are not traded in a public exchange, investors understand that their investments are not liquid. A real estate private equity firm with over 20 years of successful performance, are currently looking to add a Property Accountant to their team. On Blackstone's third-quarter earnings call in October, Gray blamed REIT redemptions on market volatility, which he said had driven away individual investors from active equity and fixed income funds. Their recent property acquisitions recorded as of June 2021 were 15 investments 17 residential properties, 28 industrial properties, and 1 office property amounting to $2.1B. Dati relativi al dispositivo e alla connessione a Internet, come l'indirizzo IP, Attivit di navigazione e di ricerca durante l'utilizzo dei siti web e delle app di Yahoo. Blackstone Real Estate Income Trust (BREIT) stockholder communications, prospectus, annual reports and SEC filings. BREIT has 4 types of common shares which differ in how the investors will be charged. By. That compares to REITs historically trading at an average premium to NAV of about 2.5%. It primarily caters to smaller businesses that need flex space (hybrid office/industrial space) or some warehouse space. Blackstone has reported a 9.3% year-to-date return for its REIT, net of fees, a contrast to the publicly traded Dow Jones U.S. Jika diperluas, akan tampil daftar opsi pencarian yang akan mengganti input pencarian agar sesuai dengan pilihan saat ini. Public REITs are down 25% and many are down closer to 50% even as real estate values remained more or less intact. With the help of BX REIT Advisors LLC, their investment strategy is to invest in stabilized and diverse real estate portfolios to provide income to their investors. As of FY 2020, BREITs real estate debt investments consist of 194 investments in CMBS, 15 investments in RMBS, 10 corporate bond investments, and 9 real estate loans. The deal values the, One interesting aspect of this deal is that it will provide an unexpected windfall to shareholders of. And management is also skilled and motivated, as insiders own around 40% of the company. In many cases, the discount is 20, 30, 40, or even 50% in extreme cases. In addition to having passed all CFA exams, Jussi holds a BSc in Real Estate Finance from University Nrtingen-Geislingen (Germany) and a BSc in Property Management from University of South Wales (UK). BREIT has delivered differentiated returns for its investors since its formation. Multifamily REIT Preferred Apartment Communities announced . Blackstone has outperformed the market over the past 15 years by 5.0% annually. Sarah Borchersen-Keto. An Investors Perspective Into Blackstone REIT (BREIT), An Investors Perspective Into Apple Hospitality REIT, Everything You Want to Know About Armour Residential REIT, Why you Should Look into Crown Castle REITs, An Investors Perspective Into Whitestone REITs. See here for a complete list of exchanges and delays. The trust's managers said last month they were reviewing options after receiving an unsolicited expression of interest to buy out all its stapled securities. That's a 39% premium to its stock price on Feb. 9, when news broke that . You can buy or sell with minimal fees with just a few clicks of mouse. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. "The impact on Blackstone depends on whether the REIT is able to stabilize its net asset value over time, or is forced to enter an extended run-off scenario, with significant asset sales and ongoing redemption backlog too early to tell, in our view," BMO Capital Markets analysts wrote in a note. Making the world smarter, happier, and richer. Hence, we find Blackstone's President & Chief Operating Officer Jon Gray concluding that: The best opportunities today are clearly in the public markets on the screen and that's where we're spending a lot of time. Total returns could be higher if you account for the accumulated share distributions throughout your investment years. Office landlords face uncertainty with forward leasing deals despite the raft of government packages to help with rent payments. As of FY 2020, each common stock class received a gross distribution of $0.6354 per share. Since its inception, it has deployed over $83 billion to multifamily investors, oil and gas producers, hotel managers, retail stores, and enterprises for their property purchases. To make the world smarter, happier, and richer. If we were just investing in BREIT, we would miss these opportunities to gain geographic diversification. And our opportunistic funds protected capital, down only 1%, so we only performed by 16% for our customers over the index. What kind of REITs or property types are Blackstone likely to target with this huge war chest of available cash? The deal values theindustrial REITat $7.6 billion. Source: BREIT Fact Card (as of July 2021). Although Santarelli kept his price target for Gaming & Leisure Properties Inc. at $60 per share, he bumped his . Blackstone Inc. will purchase American Campus Communities, Inc. (NYSE: ACC) in a $12.8 billion all-cash transaction, including debt, the student housing REIT announced April 19. "Our business is built on performance, not fund flows, and performance is rock solid," the spokesperson said. Jussi Askola is a former private equity real estate investor with experience working for a +$250 million investment firm in Dallas, Texas; and performing property acquisition in Germany. He added that the REIT had ample cash reserves to "weather pretty much any storm." Invest better with The Motley Fool. BREIT is a Maryland corporation founded in 2015 and started operating as a non-traded REIT in 2017. It still has a lot of dry powder after its latest deal, suggesting its shopping REIT shopping spree could continue. Blackstone will often claim that BREIT is superior to public REITs because it supposedly provides better diversification benefits. Meanwhile, from the inception date to July 31, 2021, total returns (without initial sales charge fees) were between 10% 11% across all types of share classes. It owns mainly rental housing and industrial properties. And the company isn't obligated to make any repurchases, so it could choose to buy back even fewer shares than the limit or none at all. Florence Chong speaks to Anil Reddy You need to be a registered user to read this content Like the BPP funds, BREIT doesn't buy fixer-uppers. Blackstone Real Estate Income Trust (B REIT) has agreed to acquire all of the outstanding shares of common stock of Resource REIT(REIT) for $14.75 per share in an all-cash transaction valued at $3.7 billion.. Philadelphia, PA, January 24, 2022 - Resource REIT, Inc. (the "REIT" or the "Company"), a publicly registered non-traded real estate investment trust, announced today that it has entered into a definitive agreement with Blackstone Real Estate Income Trust, Inc. ("BREIT"), under which BREIT will acquire all of the outstanding shares of common stock of the REIT for $14.75 per share . NAV REITs do away with daily price fluctuations, making them less volatile compared to traded REITs. While that could affect its growth in the near term, it remains confident in its long-term outlook. What Blackstone's REIT Acquisition Spree Is Telling Investors, Blackstone Is Becoming a Real Estate Powerhouse, 2 FAANG Stocks Billionaires Are Selling in Droves and 1 They Can't Stop Buying, 3 Stocks That Could Join Apple, Microsoft, and Alphabet in the $1 Trillion Club, 1 Bargain-Basement Warren Buffett Stock Down 78% to Buy Before It Starts Soaring, 2 Growth Stocks That Can Turn $250,000 Into $1 Million by 2030, With billions of dollars in dry powder across its real estate private equity funds and cash continuing to pour into its funds. I have no business relationship with any company whose stock is mentioned in this article. Write by: BREIT is a non-listed REIT that invests primarily in stabilized income-generating commercial real estate investments across asset classes in the United States and, to a lesser extent, real estate debt investments . New York, June 22, 2021 - Blackstone Real Estate Income Trust, Inc. ("BREIT") announced today that it has entered into a definitive agreement to acquire Home Partners of America ("HPA"), valuing the company at $6.0 billion. The stock, however, is only traded over the counter in the US as well as on the Toronto Stock Exchange under the ticker symbol HOM.U. For the first six months of the year, our real estate strategies appreciated 9% to 10% versus a 20% decline in the REIT index, equaling an outperformance of roughly 3,000 basis points. (Reuters) - Cvent Holding Corp, a U.S. software provider that facilitates in-person and virtual meetings, has rejected a $3.9 billion acquisition offer from buyout firm Blackstone . For example, Blackstone provides the option to repurchase shares from investors once a month. Our Standards: The Thomson Reuters Trust Principles. Learn More. Blackstone shares ended down 7.1% on the news on . Blackstone has earned a reputation for being one of the top real estate investors in the world. It had only deployed about $47.2 billion by the end of the first quarter. In 2021, BREIT raised nearly $25 billion from investors. . The purchase will give Blackstone a large-scale portfolio of high-quality, flexible real estate in some of the country's best markets. Just because something isn't quoted does not mean that it isn't correlated or volatile. The majority of their real estate properties are in the residential (especially multifamily homes) and industrial sectors. This year, the company has set its sights particularly on acquisitions of real estate investment trusts ("REITs"). Even Blackstone's COO indirectly told us in the Q2 conference call that public REITs are a lot more opportunistic today: "The best opportunities today are clearly in the public markets on the screen and that's where we're spending a lot of time.". They've . This button displays the currently selected search type. Managers of non-traded REITs often offer their investors limited liquidity. Receive at least 75% of gross income from real estate, such as real property rents . What's more, the portfolio is performing quite well organically as well. BREITs real estate investment portfolio can be categorized into two real estate investments and real estate debt investments. Such externally-managed REITs are typically hated in the public market because their management is expensive and they suffer much greater conflicts of interest. I am not receiving compensation for it (other than from Seeking Alpha). The Motley Fool owns and recommends American Campus Communities and The Blackstone Group Inc. For a Limited-Time - You can join Seeking Alphas #1 community of real estate investors at the Lowest-Rate-Ever-Offered. HPA's unique, resident-led business model expands housing access and choice, while providing a clear path to . Usually, these distributions are credited 20 days after the end of every month. We take a look at two attractive REITs trading significantly below their net asset values. The price history tells you how the company is valued at face value. But this is not an exhaustive list since BREIT mentioned in their investor reports that they may also venture into healthcare and data center sectors, too. Indeed, according to Green Street Advisors, REITs are currently trading at an average discount to net asset value ("NAV") of about 10%. 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