Blackstone’s BREIT Fulfills 100 Percent Redemption Requests for First Time Since Late 2022

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Blackstone (BX) Real Estate Income Trust (BREIT) has fulfilled its backlog of redemption requests for the first time since late 2022, following a more than yearlong stretch of investors retreating from the non-traded fund.

BREIT posted a letter to its website Friday announcing it had fulfilled 100 percent of its $961 million of repurchase requests in February. The redemption requests were down 26 percent from January and 82 percent from its January 2023 peak of $5.3 billion.

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“BREIT’s semi-liquid structure worked as intended —offering investors the potential for higher net returns in exchange for a measure of liquidity,” Blackstone said in a statement. 

A lengthy run of redemption requests has taken a toll on the value of BREIT, which had a net worth of $61 billion as of Jan. 31, 2024, according to a Blackstone stockholder prospectus. The REIT was worth more than $70 billion in late 2022 prior to facing a surge of redemption requests. 

The BREIT letter noted the fund has paid investors an 11.1 percent annualized net return since its inception in 2017 and outperformed other non-traded REITs by 600 basis points in 2023. The private REIT pivoted during the onset of the COVID-19 pandemic to shift the portfolio largely to rental housing, industrial and data centers in Sun Belt markets. 

The flurry of redemption requests BREIT and other non-traded REITs faced in late 2022 as the commercial real estate market got hit hard from aggressive interest rate increases prompted Blackstone to limit withdrawals in December of that year. BREIT has returned more than $15 billion of liquidity to its shareholders over the past 15 months, according to its letter. 

“Both inflation and interest rates have come down meaningfully from their recent peaks which, if sustained, should be a long-term positive for real estate values,” BREIT said in the letter. “At the same time, new construction in our key sectors has significantly declined, supporting pricing power of our existing assets.” 

Andrew Coen can be reached at acoen@commercialobserver.com