Blackstone Inc.’s giant real estate trust for wealthy individuals saw redemption requests ease to the lowest point this year as it limited withdrawals for a ninth consecutive month.
(Bloomberg) — Blackstone Inc.’s giant real estate trust for wealthy individuals saw redemption requests ease to the lowest point this year as it limited withdrawals for a ninth consecutive month.
Investors sought to cash out $3.7 billion in July from Blackstone Real Estate Income Trust, according to a letter Tuesday. BREIT returned about $1.3 billion, or about 34% of what was requested.
Withdrawal requests in July fell for the third consecutive month, dropping from the $3.8 billion that investors asked to pull in June. Since Nov. 30, when BREIT began limiting withdrawals, it has returned $9.4 billion to investors.
The $68 billion Blackstone trust has been working through redemption requests that picked up last year. Retail investors became more hesitant about locking up cash in commercial property while the sector was grappling with higher borrowing costs and falling property values.
BREIT has sold $12 billion of real estate assets since the beginning of 2022, generating $2.5 billion of profit during its ownership, according to Blackstone. Recent transactions include an $800 million sale of a Texas hotel, and a $2.2 billion deal to offload a self-storage business.
Returns are lower than in recent years. A major BREIT share class has returned 1.3% this year through June, after gaining 8.4% in 2022 and about 30% in 2021. The trust has the option to limit redemptions to 2% of its net asset value each month and 5% each quarter.
“This structure was designed to both prevent a liquidity mismatch and maximize long-term shareholder value,” according to the letter. “A shareholder who began submitting repurchase requests when proration began has received approximately 94% of their money back and the semi-liquid structure is working as intended.”
BREIT is focusing on sectors as logistics, rental housing and data centers, according to the letter to shareholders.
–With assistance from Dawn Lim.
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