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Blackstone REIT Limits Redemptions

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In a letter to stockholders posted to its website late yesterday, Blackstone REIT announced for the first time in its six-year history that it failed to fulfill all investor repurchase requests made during the month of November.

As reported earlier this week by The DI Wire, Blackstone REIT’s redemption requests have soared in recent months.

The REIT’s share repurchase plan allows for redemptions of up to 2% of the company’s net asset value in any given month and 5% of NAV in a calendar quarter. In October, redemptions equaled 2.7% and were fulfilled upon approval by its board of directors. Significant redemption requests once again exceeding the monthly limit of 2% of NAV continued in November, bringing the quarterly redemption requests to exceed the limit of 5%.

As a result, BREIT announced that November redemptions were gated at 2%, fulfilling just 43% of each investor’s repurchase request.

In December, the company advised that only 0.3% of NAV will be eligible to repurchase shares before reaching the 5% cut-off. Further, the company stated that it would only fulfill redemptions up to 2% of NAV in January.

Blackstone REIT announced yesterday that it has agreed to sell its minority stake in the MGM Grand and Mandalay Bay resorts in Las Vegas for nearly $1.3 billion. According to reporting by Bloomberg, the sale should net the REIT a profit of roughly $730 million.

Blackstone REIT is sponsored by private equity giant Blackstone Group (NYSE:BX), whose shares fell by more than 10% yesterday upon release of the letter to shareholders of their flagship non-traded REIT. The stock closed at $85.04, down 7.09%.

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