Finance  ·  Distress

Blackstone’s REIT Limits Withdrawals for the Sixth Month in a Row

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Blackstone’s real estate investment trust (REIT) limited its redemptions for the sixth month in a row in April, after investors tried to pull $4.5 billion out of the property giant.

Blackstone Real Estate Income Trust (BREIT) let its shareholders pull out $1.3 billion, or roughly 29 percent of what they requested to withdraw, as a rush of investors looked to take money out of the $70 billion fund amid a turbulent real estate market and rising interest rates, Bloomberg reported.

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The non-listed REIT has paid out a whopping $6.2 billion to investors since November and hit its redemption limits every month since, with January hitting a peak of $5 billion requests. Shareholders also tried to take out $4.5 billion in March.

BREIT’s portfolio — mostly concentrated in rental housing, industrial properties and data centers in the Southeastern and Southwestern United States — recorded a negative net return of 0.5 percent in the first quarter, because the value of BREIT’s hedges against higher interest rates shrunk when U.S. Treasury yields fell slightly earlier this year, Bloomberg reported. 

The fund, however, has delivered a 12 percent annualized return since its founding six years ago, Blackstone (BX) spokesperson Jeffrey Kauth said. And BREIT, which makes up roughly 17 percent of Blackstone’s overall earnings, has “virtually no exposure” to struggling asset classes like office, BREIT wrote in a Monday letter to investors. 

“We remain confident that BREIT’s portfolio will continue to be well-positioned to deliver strong long-term performance and consistent distributions, while providing investors access to the diversification benefits of high-quality real estate as a core portfolio holding,” the letter read.

Celia Young can be reached at cyoung@commercialobserver.com.