BREIT Reports Lower Redemptions in February, But Still Too Many

Blackstone Real Estate Income Trust, the $69 billion non-traded REIT sponsored by private equity giant Blackstone Group (NYSE:BX), announced the company received repurchase requests of $3.9 billion in February 2023, approximately 26% less than the total received in January. However, redemptions still far exceeded the company’s 2% limit of total net asset value per month.

The company says they fulfilled approximately $1.4 billion of repurchase requests, which is equal to 2% of net asset value and represents 35% of the shares submitted for repurchase. Currently, BREIT’s repurchases were fulfilled at the Jan. 31, 2023, NAV per share for investors applicable share class.

This update comes nearly a month after the news that investor repurchase requests, once again, exceeded 2% of its net asset value in January, the maximum monthly amount permitted under terms of the company’s share repurchase plan. The company previously limited redemption requests after, for the first time in its six-year history, failing to fulfill all investor repurchase requests made in November 2022.

Despite the continuing flood of redemption requests, BREIT execs continue to point to the company’s underlying performance:

• 12.3% annualized net return since inception (Jan. 1, 2017), outperforming publicly traded REITs by more than two times.
• 14.4% annualized net return over the past three years.
• 8.4% net return in 2022, supported by 13% estimated cash flow growth from their real estate assets, while most asset classes suffered significant losses.
• 4.5% annualized distribution rate, equal to a current 7.1% tax-equivalent yield given 94% of 2022 distributions were characterized as “return of capital.”

In January, the REIT also announced a $4 billion investment from the University of California endowment, which was later increased by an additional $500 million investment.

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