EdR Student Housing Portfolio (10,610 units), Southeast MH portfolio (8,563 units), Acorn Multifamily Portfolio (8,309 units), etc. That was . 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). On Blackstone's third-quarter earnings call in October, Gray blamed REIT redemptions on market volatility, which he said had driven away individual investors from active equity and fixed income funds. Blackstone Group(BX 0.97%) is back in the headlines again this week with another multi-billion-dollar purchase of a real estate investment trust (REIT). And Blackstone's financial capacity to continue scooping up undervalued REITs is massive. It still has a lot of dry powder after its latest deal, suggesting its shopping REIT shopping spree could continue. High Yield Landlord is managed by Leonberg Capital. This button displays the currently selected search type. Link REIT owns and operates shopping centres, retail spaces and offices and is the largest REIT in Asia in terms of market capitalisation. They earn income by leasing out rental spaces to clients. Multifamily REIT Preferred Apartment Communities announced . 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. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. The 2 main distinctions of REITs in terms of how they earn income are equity and mortgage REITs. 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. Disclosure: I/we have a beneficial long position in the shares of CORE PORTFOLIO + RETIREMENT PORTFOLIO + INTERNATIONAL PORTFOLIO either through stock ownership, options, or other derivatives. The Vanguard Group, Inc. is currently the company's largest shareholder with 9.3% of shares outstanding. I think that the risk-to-reward of these discounted public REITs are far better. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. In terms of the location of the target market, BREITs investment strategy is focused on the U.S. market. If you dont like it, we wont charge you a penny! This is its first investment outside China. Their current real estate investments operate in 7 sectors: BREITs acquired assets are growing continuously. I have no business relationship with any company whose stock is mentioned in this article. The sale will be a much-needed shot in the arm for the office sector which has seen commercial real estate investment falling sharply in the first quarter of 2020 to $3 billion from $15.9 billion in the previous quarter. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Blackstone limited withdrawals from its $69 billion unlisted REIT on Thursday after redemption requests hit pre-set limits amid investor concerns it was slow to adjust valuations as interest rates . Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. High Yield Landlord is managed by Leonberg Capital. More investors are entrusting it with more of their capital, giving it the funds to acquire more real estate. Herbert Smith Freehills, JLL and Cushman & Wakefield advised on the sale. Click here to learn more!. The price history tells you how the company is valued at face value. All of these are made possible through sponsorship from the Real Estate Group of The Blackstone Group, Inc. with decades of real estate experience. Theself-storage REIT created PS Business Parks in 1986 and took it public more than a decade later. 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. With 8.1% and 4.3% of the shares outstanding respectively, BlackRock, Inc. and Blackstone Inc. are the second and third largest shareholders. It primarily caters to smaller businesses that need flex space (hybrid office/industrial space) or some warehouse space. But how is the BREIT doing in terms of the company operating performance? BREITs occupancy rates are all above 90% for almost all sectors, with the exemption of the hotels/hospitality sector. Blackstone is a premier global investment manager. That was four times more than the company's redemption limit, forcing it to restrict redemptions once again. The Motley Fool has a disclosure policy. 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. As a result, it will receive about $2.7 billion in cash when the deal closes. Is this happening to you frequently? Last but not least, since REITs are today priced at large discounts to fair value, they also pay a higher yield and offer a lot greater upside potential. As of FY 2020, each common stock class received a gross distribution of $0.6354 per share. Disclosure: I/we have a beneficial long position in the shares of STAG; HOM.U either through stock ownership, options, or other derivatives. BREIT has the authority to issue a total of 10,100,000,000 shares. I don't know many asset classes that perform -- outperform indexes by 3,000 basis points." But what about today? Residential, specifically multi-family homes, bring the most rental revenue to BREITs portfolio, followed by the industrial sector. That, for us at High Yield Landlord, is not enough on its own. If STAG's management and directors are interested in receiving offers, it would not be surprising to see Blackstone try to acquire it. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. That's a 39% premium to its stock price on Feb. 9, when news broke that . Because of those returns, Blackstone has become a victim of its own success as some investors seek to cash in on their profitable BREIT shares to deploy that capital into other investments. In many cases, the discount is 20, 30, 40, or even 50% in extreme cases. Investment advisors assess the shares and report them in terms of fair value, like how mutual funds work. Per maggiori informazioni sulle modalit di utilizzo dei dati, consulta la nostra Informativa sulla privacy e lInformativa sui cookie. Blackstone is the 1000-pound gorilla in any real estate room. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. 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. Source: BREIT Prospectus (as of June 30, 2021). With the help of BX REIT Advisors LLC, their investment strategy is to invest in stabilized and diverse real estate portfolios to provide income to their investors. "These all will continue put pressure on Blackstone's premium valuation," they wrote. The information in his articles and his comments on SeekingAlpha.com or elsewhere is provided for information purposes only. BREITs common stocks are priced at their fair value in terms of NAV net asset value. , Blackstone will likely continue its real estate shopping spree. 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. 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. 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 . Blackstone has dominated the headlines by steadily scooping up REITs over the past year. Blackstone Real Estate Income Trust, Inc. (BREIT) has real estate investments in diverse sectors such as residential, industrial, office, storage, and hotel/hospitality. Blackstone (BX.N) limited withdrawals from its $69 billion unlisted REIT on Thursday after redemption requests hit pre-set limits . 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. 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. Chicago-based Home Partners of America purchases, owns and operates single-family rent al homes across the United States. For example, Blackstone provides the option to repurchase shares from investors once a month. If I owned BREIT, I would try to get out of it to invest in public REITs instead. Since its inception in 2017, BREIT has consistently issued monthly distributions to its stockholders. If investors want to buy BREIT shares, they must have: BREIT has 4 types of share classes which differ in how the investors will be charged. Class S shares were the first issued common stock of BREIT in 2017 at $10. The general trend of NAV prices for all class shares was increasing until a sudden drop occurred in the first quarter of 2020 during the onset of the COVID-19 pandemic. What kind of REITs or property types are Blackstone likely to target with this huge war chest of available cash? Jussi Askola is a former private equity real estate investor with experience working for a +$250 million investment firm in Dallas, Texas; and performing property acquisition in Germany. Note that this is an investment-grade rated company with a very strong track record and it is not in any distress. Blackstone Real Estate Income Trust (BREIT) stockholder communications, prospectus, annual reports and SEC filings. The company sees a massive untapped opportunity for high-net-worth investors since they have a low percentage of their portfolios currently allocated to alternatives. PS Business Parks currently owns 97 business parks with 28.1 million square feet of commercial space leased to about 5,100 tenants. BREIT offers a 4.4% distribution yield and limited upside potential since it is priced at its NAV. It was bought on a sharp yield of close to 4 per cent. Natalie Wong. The Motley Fool has positions in and recommends Blackstone. July 16, 2021. New York, June 22, 2021 - Blackstone Real Estate Income Trust, Inc. ("BREIT") announced today that it has entered into a definitive agreement to acquire Home Partners of America ("HPA"), valuing the company at $6.0 billion. Instead, it continues to deliver differentiated performance. BREIT also invests in non-distressed public and private real estate debt such as: With the expertise of their investment advisors, BREIT uses leverage through financing to multiply their funds for the increased potential of investment returns. Blackstone President Jon Gray received $479.2 million as income in 2022. Blackstone has outperformed the market over the past 15 years by 5.0% annually. By Milana Vinn. 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. Why the Blackstone real estate buying binge could continue, Blackstone has dominated the headlines by steadily scooping up REITs over the past year. NAV REITs do away with daily price fluctuations, making them less volatile compared to traded REITs. Blackstone also said in the prospectus it had access to $9.3 billion in "immediate liquidity.". What Blackstone's REIT Acquisition Spree Is Telling Investors, Blackstone Is Becoming a Real Estate Powerhouse, 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, With billions of dollars in dry powder across its real estate private equity funds and cash continuing to pour into its funds. While a cheaper fair value is good news for new investors. The deal values theindustrial REITat $7.6 billion. Were working to restore it. Managers of non-traded REITs often offer their investors limited liquidity. Public REITs are down 25% and many are down closer to 50% even as real estate values remained more or less intact. 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. The company reports its financial statements and regular updates through SEC filings for public reference. ", stunning outperformance continued last year. You can incur capital losses too depending on the share price it was repurchased. I wrote this article myself, and it expresses my own opinions. The deal will add a large-scale portfolio of business park, office, and industrial assets to Blackstone's burgeoning real estate portfolio. Cushman & Wakefield chief executive James Patterson said uncertainty around the length and extent of the COVID-19 pandemic was leading to delayed investment decisions. LONDON, Dec 2 (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. There are literally no signs of a slowdown yet for STAG's industrial real estate, and yet the market has punished STAG with a ~35% selloff this year. BREITs common stocks are priced at their fair value in terms of NAV net asset value. Blackstone started seeing a flood of redemption requests late last year, exceeding its limit. It invests in real estate properties across 8 sectors and real estate debt through mortgage-backed securities and other real estate-related loans. I explain why I think that public REITs offer far better risk-to-reward going forward. Contrary to traded REITs, BREIT invests in perpetual-life REITs wherein NAV prices are valued daily or monthly with a limited liquidity period. Get them exclusively at High Yield Landlord. 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