Excellent. 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. It leads to "growth at all costs", which hurts returns, and this is why such externally-managed REITs are disliked by investors. Liz Brumer-Smith (Blackstone): Blackstone is one of the leading alternative asset-management companies in the world. This gives a hint as to why Blackstone has been hoovering up REITs like a vacuum this year. July 16, 2021. 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. Blackstone has outperformed the market over the past 15 years by 5.0% annually. Ascendas Hospitality and Hong Kong-based Gaw Capital declined to comment. Blackstone Real Estate Income Trust Inc., a publicly registered non-traded real estate investment trust sponsored by private equity giant Blackstone (NYSE: BX), has agreed to purchase American International Group Inc.'s (NYSE: AIG) interests in a U.S. affordable housing portfolio for approximately $5.1 billion, in an all-cash . 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. Some investors are seeking liquidity to cover losses incurred elsewhere. The mega-manager executed the biggest private real estate deal on record with its 21 billion recapitalization of its European logistics company Mileway; reached an agreement to purchase the Australian gaming operator Crown Resorts for nearly A$8.9 billion ($6. I wrote this article myself, and it expresses my own opinions. . Since inception date to July 31, 2021, total returns (without initial sales charge fees) were between 10% 11% across all types of share classes. 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. 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.". As of March 17, 2021, it has a total of 112,104 stockholders. Click here to learn more!. Looking for more investing ideas like this one? But it is hard to ignore the huge disparity in valuations between BREIT and Public REITs in today's market. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. 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. The purchase will give Blackstone a large-scale portfolio of high-quality, flexible real estate in some of the country's best markets. Blackstone Inc. agreed to buy student-housing owner American Campus Communities Inc. in a deal valuing the company at about $12.8 billion, including debt, a bet that rents will continue to rise as . [added emphasis]. You can buy or sell with minimal fees with just a few clicks of mouse. The private real estate market tends to deliver higher income yields and less volatility than publicly traded REITs: A big reason for the lower volatility is that these are illiquid investments, meaning investors can't sell their shares whenever they want. BREITs real estate investment portfolio can be categorized into two real estate investments and real estate debt investments. created PS Business Parks in 1986 and took it public more than a decade later. Blackstone will often claim that BREIT is superior to public REITs because it supposedly provides better diversification benefits. He has authored award-winning academic papers on REIT investing, been featured on numerous financial media outlets, has over 50,000 followers on SeekingAlpha, and built relationships with many top REIT executives. Residential, specifically multi-family homes, bring the most rental revenue to BREITs portfolio, followed by the industrial sector. Funds controlled by Stephen . Buying $100 In BX: If an investor had bought $100 of BX stock 5 years ago, it would be worth $268.05 today based on a price of . 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). By Milana Vinn. Consider These Alternative Real Estate Investments. Like Salesforce.com, inc. (NYSE:CRM), Roblox Corporation (NYSE:RBLX), and Advanced Micro Devices, Inc. (NASDAQ:AMD), HubSpot, Inc. (NYSE:HUBS) is a stock that many elite hedge funds have been . On Thursday, the firm said the REIT had agreed to sell its 49.9% interest in two Las Vegas casinos for $1.27 billion. The asset management behemoth boasts roughly $50 billion in dry powder capital earmarked for global real estate, including a new real estate fund with over $24 billion in commitments from investors so far. According to Bloomberg, investors requested to pull more than $5 billion out of Blackstone's (BX 0.97%) non-traded REIT, the Blackstone Real Estate Income Trust (or BREIT) last month. 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). Therefore, I continue to accumulate real estate through the public market. This implies that the REIT was able to sell properties at a significant gain from its original purchase price. Cost basis and return based on previous market day close. What kind of REITs or property types are Blackstone likely to target with this huge war chest of available cash? Digging into Blackstone's latest real estate deal, Blackstone has agreed to pay $187.50 per share in cash for PS Business Parks, a roughly 15% premium to its average share price over the last two months. We have over 500 five-star reviews from happy members who are already profiting from our real estate strategies. 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. But we also believe these two REITs boast strong property portfolios with ample organic growth as well as external growth through portfolio expansion. With billions of dollars in dry powder across its real estate private equity funds and cash continuing to pour into its funds, Blackstone will likely continue its real estate shopping spree. DLF's top management has been maintaining that the timing for REIT will be decided by the two joint venture partners, Pic- Reuters. Under the terms of the agreement, B REIT will acquire the REIT 's portfolio of multifamily, garden-style assets comprised of 42 apartment communities totaling more than 12,600 units. These deals showcase its growing, dominance in the commercial real estate sector, However, even after the recent REIT shopping spree, Blackstone still has plenty of dry powder to continue buying real estate. It had only deployed about $47.2 billion by the end of the first quarter. The Vanguard Group, Inc. is currently the company's largest shareholder with 9.3% of shares outstanding. This limits your ability to get in and out of the real estate market, increasing risks, and potentially also limiting your ability to act on new investment opportunities. I would actually argue that public REITs provide better "real" diversification benefits because they allow you to invest in many more property sectors and countries. BREIT also has real estate debt investments through securities and loans backed by the U.S. market. Do your own research or seek the advice of a qualified professional. The sale was part of Blackstone's acquisition of the Scentre Group office portfolio in August 2019 and Link's financing was completed late last week. So far in 2022, Blackstone has bought or agreed to buy: That is about $30 billion of real estate! The majority of their real estate properties are in the residential (especially multifamily homes) and industrial sectors. , Blackstone will likely continue its real estate shopping spree. DISCLAIMER: Jussi Askola is not a Registered Investment Advisor or Financial Planner. Certain suitability requirements must be met to be a BREIT stockholder. 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. So far, its highest total net distribution (includes deductions of corresponding fees already) was Class I shares in FY 2019. Blackstone Inc on Monday agreed to buy real estate investment trust (REIT) PS Business Parks for $7.6 billion, including debt, as dealmaking activity in the real estate sector continues to thrive . Clearly, as the Vanguard Real Estate Index (VNQ) has sold off along with the broader market this year, Blackstone believes that there is ample value to be found in REITs. Please try again later. US private equity giant Blackstone Group has defied market jitters and pulled off a mega sale of an office tower above the Westfield mall in Sydney's CBD to Hong Kong-based Link REIT for $683 . To be fair, BREIT is a pretty vehicle and it has a strong track record. Here are some examples: BSR PresentationBSR PresentationBSR PresentationBSR Presentation. BREIT is a REIT where shares are held by investors, but those shares aren't traded. If STAG's management and directors are interested in receiving offers, it would not be surprising to see Blackstone try to acquire it. Investors always going with the big names to their detriment. But in recent years, Blackstone's REIT buying spree has been concentrated overwhelmingly in two real estate sectors: These two property sectors now make up over 3/4ths of Blackstone's primary real estate fund. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. The real estate group of Blackstone, Blackstone Real Estate, is our sponsor and an affiliate of BX REIT Advisors L.L.C. The REIT is marketed to wealthy individual investors. Simply Self Storage, East Coast Storage Portfolio, Cactus Storage Portfolio, etc. Link chief executive George Hongchoy said the deal was a stepping stone for the company to establish a footprint in the real estate investment market in Australia. (the "Adviser"). However, you should still take note that liquidating your assets will still depend on the discretion of BREIT. For a Limited-Time - You can join Seeking Alphas #1 community of real estate investors at the Lowest-Rate-Ever-Offered. DLF holds bulk of its rental assets (offices and . As an equity REIT, they have a diverse coverage of real estate investments. BREIT outperformed the MSCI U.S. REIT Index net return in 2020 (-7.6%) with a 6.1% net return of Class S shares which has the most number of stockholders among its common shares. Like the BPP funds, BREIT doesn't buy fixer-uppers. 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. This time it's buying PS Business Parks . A majority (by 89%) of BREITs income comes from rental revenues across a diverse set of asset classes much of it comes from residential and industrial sectors. 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. Puoi cambiare le tue preferenze in qualunque momento nella sezione Le tue impostazioni per la privacy. . Image courtesy of Bluerock Residential Growth REIT. Blackstone Real Estate Income Trust Inc. agreed to buy Resource REIT Inc. in a deal valued at $3.7 billion, expanding its bet on U.S. rental housing. BREIT is a hybrid REIT because it deals with both. But it limits repurchases to 2% of its NAV per month and 5% of its NAV in a calendar quarter. The 100 Market Street site, which sits on top of the Westfield mall on the corner of Pitt Street and is the home of the Australian Taxation Office and retail landlord Scentre Group, will be Link REIT's maiden investment in Australia. 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. We're currently running a sale at my private investing ideas service, High Yield Landlord, where members get access to portfolios, market alerts, real-time chat, and more. BREIT has delivered differentiated returns for its investors since its formation. When expanded it provides a list of search options that will switch the search inputs to match the current selection. For instance, in the first quarter of this year, cash same-store net operating income grew 4.8%, while the REIT has guided for same-store NOI to grow 4-5% for the full year. DISCLAIMER: Jussi Askola is not a Registered Investment Advisor or Financial Planner. They earn income by leasing out rental spaces to clients. BREIT offers a 4.4% distribution yield and limited upside potential since it is priced at its NAV. Tombol ini menampilkan jenis pencarian yang dipilih saat ini. The REIT also represented a bid to win over high net-worth investors clamoring for private market products, which they believe perform better than those that are publicly traded. Blackstone President Jon Gray received $479.2 million as income in 2022. The stock has a fifty day moving average price of $22.70 and a 200 day moving average price of $24.69. 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. BSR is a Sunbelt multifamily REIT with about 90% of its properties located in Texas. See here for a complete list of exchanges and delays. If you dont like it, we wont charge you a penny! 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. If we were just investing in BREIT, we would miss these opportunities to gain geographic diversification. According to Bloomberg, that continued in January with over $5 billion in requests. 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. "These all will continue put pressure on Blackstone's premium valuation," they wrote. I wrote this article myself, and it expresses my own opinions. Our Standards: The Thomson Reuters Trust Principles. To give you an example, at High Yield Landlord, we hold an international Portfolio with REITs from 6 different countries. I don't know many asset classes that perform -- outperform indexes by 3,000 basis points. Is now still a better time to invest in BREIT, or should you rather consider public REITs? Since its inception in 2017, BREIT has consistently issued monthly distributions to its stockholders. Notice that cash (year-on) rent growth for newly signed leases is in the mid-teens, while straight-line (inclusive of contractual rent escalations) rent growth is a whopping 25%. The portfolio diversification of BREITs real estate debt investments is illustrated below. Their strongest market comes from the West and Southern states. They explain on a conference call earlier this year that: "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. Blackstone is the 1000-pound gorilla in any real estate room. Mortgage REITs . Invest better with The Motley Fool. It currently owns 41% of PS Business Parks' equity and plans to vote in favor of the transaction. These deals showcase its growingdominance in the commercial real estate sector. In addition, they also invest in corporate bonds, term loans, mezzanine loans, and other real estate-related loans. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. ACC was the last public REIT dedicated to the sector to be taken private, following Campus Crest Communities' privatization by Harrison Street in 2015 and EdR by Greystar in 2018. Blackstone launched the REIT in 2017, piggybacking off the success of its real estate empire, which had by then outgrown its private equity business. Blackstone Inc (BX.N) limited withdrawals from its $69 billion unlisted real estate income trust (REIT) on Thursday after a surge in redemption requests, an unprecedented blow to a franchise that . This means that there is an external asset manager, in this case, Blackstone, that takes care of the management in exchange for fees. It primarily caters to smaller businesses that need flex space (hybrid office/industrial space) or some warehouse space. You are responsible for your own investment decisions. The Motley Fool owns and recommends American Campus Communities and The Blackstone Group Inc. It only fulfilled about a quarter of those redemptions because it hit its 2% monthly limit. This is a big draw for investor interest in REITs. Matthew DiLallo has positions in Blackstone and has the following options: short June 2023 $60 puts on Blackstone. The industry leader for online information for tax, accounting and finance professionals. Is this happening to you frequently? Blackstone Inc (BX.N) limited withdrawals from its $69 billion unlisted real estate income trust (REIT) on Thursday after a surge in redemption requests, an unprecedented blow to a franchise that helped it turn into an asset management behemoth. There is no upper limit on the size of this new fund, so it could potentially grow significantly larger. They have outperformed the MSCI U.S. REIT Index which generated only -7.6%. BREIT has the authority to issue a total of 10,100,000,000 shares. Currently, BREITs presence dominates in the NAV REIT market. Their corporate headquarters is located at 345 Park Avenue, New York. Managing more than $975 billion, the company invests money for wealthy . According to their 2020 annual report, they hold 1,370 real estate properties and 228 positions in real estate debt investments. I am not receiving compensation for it (other than from Seeking Alpha). Real estate major DLF has no plans to launch public offer of REIT in the next one year to monetise its rent-yielding commercial properties, its CEO Ashok Tyagi said. The $71 billion Blackstone Real Estate Income Trust (BRET) saw investor withdrawals of nearly $9.9 billion last year. Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. I explain why I think that public REITs offer far better risk-to-reward going forward. Blackstone has been seeking to diversify its investor base after tapping institutional investors, such as public pension funds, insurance firms and sovereign wealth funds, for its products for decades. At times, they might not even repurchase at all when you need the money urgently. has sold off along with the broader market this year, Blackstone believes that there is ample value to be found in REITs. The company reports its financial statements and regular updates through SEC filings for public reference. Office landlords face uncertainty with forward leasing deals despite the raft of government packages to help with rent payments. A disadvantage of non-traded REITs is the higher management fees as compared to traded REITs. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Receive at least 75% of gross income from real estate, such as real property rents . I think that it is inferior and yet it is a lot more expensive. Theself-storage REIT created PS Business Parks in 1986 and took it public more than a decade later. Private equity giant Blackstone Group plans to purchase 66 residential complexes in San Diego County for more than $1 billion in one of the biggest real estate transactions in local history. It has a strong balance sheet with mostly fixed-rate debt. Making the world smarter, happier, and richer. 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. More investors are entrusting it with more of their capital, giving it the funds to acquire more real estate. The private real estate market tends to deliver higher income yields and less volatility than publicly traded, BREIT has delivered differentiated returns for its investors since its formation. That means Blackstone will undoubtedly continue making headline-grabbing deals. Resource REIT (non-traded) for $3.7 billion. Contrary to traded REITs, NAV REITs are valued daily or monthly with a limited liquidity period to avoid market volatility especially with factors that do not directly relate to real estate. Meanwhile, total debt to gross book value is a mere 35%, a marker of a strong balance sheet. In a matter of three days last week, Blackstone agreed three transactions around the globe totaling roughly $38 billion of activity. The curbs came because redemptions hit pre-set limits, rather than Blackstone setting the limits on the day. However, net losses have been incurred since 2017 which can be attributed to the real estate debt portfolio. They've been around for over 26 years and . . Yahoo fa parte della famiglia di brand di Yahoo. 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. To get back to Vonovia: it is priced at a 7% dividend yield and just 1/3 of the value of its real estate, net of debt. BREITs occupancy rates are all above 90% for almost all sectors, with the exemption of the hotels/hospitality sector. Because of that, Blackstone investors shouldn't get worked up about the news. 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. February 27, 2023 3:33 PM. Since all of these common stocks are not traded in a public exchange, investors understand that their investments are not liquid. LONDON (Reuters) -While there has been little wider fallout from this week's surge in redemption requests at an unlisted Blackstone real estate income trust (REIT), it is being read by some as a warning sign. Public REITs are liquid and naturally, this will result in some volatility, but at least, you are not lying to yourself, thinking that something isn't volatile just because it isn't traded. ET, This 4.5%-Yielding Dividend Stock Has $50 Billion to Continue its Real Estate Buying Binge, 1 Roaring Dividend Stock That's Leading the Market Recovery. Total returns could be higher if you account for the accumulated share distributions throughout your investment years. Public Storage expects to recognize a $2.3 billion after-tax gain, which it intends to distribute to its shareholders. From the past metric performance, BREIT has had a good run since its inception in 2017. However, they also have non-U.S. investments, particularly in Europe, to a small extent (by about 1%). 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). Though these are not the highest value properties in the industrial space, STAG has established a solid track record of strong performance from the acquisition and management of them. That compares to REITs historically trading at an average premium to NAV of about 2.5%. 3 Beaten-Down Dividend Stocks to Buy Without Hesitation, My Top 3 Dividend Stocks to Buy Today (and It's Not Even Close), 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, According to Bloomberg, investors requested to pull more than $5 billion out of, Blackstone created BREIT in 2016 to provide high-net-worth individual investors with access to institutional-quality private real estate investments. Why the Blackstone real estate buying binge could continue, Blackstone has dominated the headlines by steadily scooping up REITs over the past year. That suggests it could make more headline-grabbing deals this year. He has authored award-winning academic papers on REIT investing, been featured on numerous financial media outlets, has over 50,000 followers on SeekingAlpha, and built relationships with many top REIT executives. Last REIT standing. Sarah Borchersen-Keto. Clicca su Gestisci impostazioni per maggiori informazioni e per gestire le tue scelte. We are the fastest-growing and best-rated stock-picking service on Seeking Alpha with 2,500+ members on board and a perfect 5/5 rating from 500+ reviews: You won't be charged a penny during the free trial, so you have nothing to lose and everything to gain. However, it recovered by the end of 2020 and soared in the first half of 2021. High Yield Landlord is managed by Leonberg Capital. Westfield tower at 100 Market Street, SydneyCredit:Peter Rae. As of July 2021, BREIT has a total of 1,508 real estate properties located across the U.S. and a small percent in Europe. Write by: A real estate private equity firm with over 20 years of successful performance, are currently looking to add a Property Accountant to their team. Let's take a look at two potential buyout targets for Blackstone in these property sectors. As a mortgage REIT, they have real estate debt investments through commercial and residential mortgage-backed securities. Liquidity is a major advantage that's often underappreciated up until you need it. 2.3 billion after-tax gain, which it intends to distribute to its shareholders a better time to invest BREIT! Their corporate headquarters is located at 345 Park Avenue, new York at High Landlord. Can join Seeking Alphas # 1 community of real estate income Trust ( BRET ) investor! 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