blackstone reit purchase
And our opportunistic funds protected capital, down only 1%, so we only performed by 16% for our customers over the index. 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 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. This is to avoid market volatility especially with factors that do not directly relate to real estate. 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%. 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. To be fair, BREIT is a pretty vehicle and it has a strong track record. July 16, 2021. The information in his articles and his comments on SeekingAlpha.com or elsewhere is provided for information purposes only. Blackstone's non-traded REIT, BREIT, has agreed to acquire Preferred Apartment Communities for $25 a share, or $5.8 billion. This is a much better management structure because the management is hired as employees of the REIT. Liz Brumer-Smith (Blackstone): Blackstone is one of the leading alternative asset-management companies in the world. The asset manager is buying so aggressively because REIT valuations are significantly below the private market valuations of their real estate. In the first quarter, same-community net operating income surged 16.3% year-over-year on the back of rent growth for new leases of 17.4% and renewals of 9.0%. But the better way to gauge a REITs performance is through its FFO. More investors are entrusting it with more of their capital, giving it the funds to acquire more real estate. Price as of February 28, 2023, 4:00 p.m. That's a 39% premium to its stock price on Feb. 9, when news broke that . 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). 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. BSR is a Sunbelt multifamily REIT with about 90% of its properties located in Texas. 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. This kind of discount would imply either that BSR's property portfolio is sub-par, that its management is unskilled or conflicted, or that its balance sheet is weak, none of which are the case. Despite the COVID-19 pandemic, BREIT achieved a 6.1% net return in 2020 for the Class S shares which has the most number of stockholders among its common shares. Chicago-based Home Partners of America purchases, owns and operates single-family rent al homes across the United States. Public Storage expects to recognize a $2.3 billion after-tax gain, which it intends to distribute to its shareholders. Blackstone started seeing a flood of redemption requests late last year, exceeding its limit. Is It a Buy Right Now? They were down a further 2% on Friday morning at $83.45. The real estate group of Blackstone, Blackstone Real Estate, is our sponsor and an affiliate of BX REIT Advisors L.L.C. Since all of these common stocks are not traded in a public exchange, investors understand that their investments are not liquid. Bellagio (NV), MGM Grand (NV), & Mandalay Bay (NV). The average annual cost of a public internally-managed REIT is around 0.6%, and some REITs like Realty Income (O) have it as low as 0.4%. The U.S. real estate investment trust, or REIT, sector was hit abnormally hard during the 2022 bear market. The index is down 17%, we were up 2.3%. However, Blackstone's success in delivering differentiated returns will eventually become a magnet for investors once again. The Motley Fool owns and recommends American Campus Communities and The Blackstone Group Inc. As a result, it will receive about $2.7 billion in cash when the deal closes. -. The spokesperson added that the REIT relied on a long-term fixed rate debt structure, making it resilient. STAG offers an attractive, 4.7% dividend yield with a payout ratio slightly below 70%. 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. 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. According to their 2020 annual report, they hold 1,370 real estate properties and 228 positions in real estate debt investments. 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. Residential, specifically multi-family homes, bring the most rental revenue to BREITs portfolio, followed by the industrial sector. This year, the company has set its sights particularly on acquisitions of real estate investment trusts ("REITs"). Nexus Select Trust has a portfolio of 17 operational shopping malls . In July, we saw another example of this accretive capital recycling as STAG sold two properties for $82 million at a 5.2% cap rate after having purchased them several years prior at an average cap rate of 6.2%. As of FY 2020, each common stock class received a gross distribution of $0.6354 per share. Even if you expected its property values to drop a bit, its share price could still double before reaching its net asset value. Learn More. 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. Natalie Wong. It had only deployed about $47.2 billion by the end of the first quarter. Currently, Blackstone has a market capitalization of $66.78 billion. An Investors Perspective Into Blackstone REIT (BREIT), An Investors Perspective Into Apple Hospitality REIT, Everything You Want to Know About Armour Residential REIT, Why you Should Look into Crown Castle REITs, An Investors Perspective Into Whitestone REITs. It gets paid a 1.25% of the NAV each year as well as 12.5% of the annual total return subject to a 5% hurdle. 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. I wrote this article myself, and it expresses my own opinions. Do your own research or seek the advice of a qualified professional. So far in 2022, Blackstone has bought or agreed to buy: Preferred Apartment . Were working to restore it. The unconsolidated investments come from their joint venture with MGM Growth Properties LLC, wherein BREIT owns 49.9% of interest. Making the world smarter, happier, and richer. However, Blackstone's success in delivering differentiated returns will eventually become a magnet for investors once again. At $16.50 per share (as of this writing), BSR trades at a remarkable 25% discount to its Q1 2022 NAV per share of $21.98. There are also selling commissions upfront that can amount up to 3.5% and stockholder servicing fees that can add up to 0.85% each year. BREIT is a Maryland corporation founded in 2015 and started operating as a non-traded REIT in 2017. Philadelphia, PA, January 24, 2022 - Resource REIT, Inc. (the "REIT" or the "Company"), a publicly registered non-traded real estate investment trust, announced today that it has entered into a definitive agreement with Blackstone Real Estate Income Trust, Inc. ("BREIT"), under which BREIT will acquire all of the outstanding shares of common stock of the REIT for $14.75 per share . Currently, BSR trades at a particularly stark discount. Two sources familiar with the matter said turmoil in Asian markets, fueled by concerns about China's economic prospects and political stability, contributed to the redemptions. Resource REIT (non-traded) for $3.7 billion. . Excellent. BREITs common stocks are priced at their fair value in terms of NAV net asset value. BREIT is a SEC-registered REIT since 2017. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Overall, BREIT is one of the leading players in the NAV REIT market industry. Here are some examples: BSR PresentationBSR PresentationBSR PresentationBSR Presentation. Tombol ini menampilkan jenis pencarian yang dipilih saat ini. If we were just investing in BREIT, we would miss these opportunities to gain geographic diversification. 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. Public REITs are down 25% and many are down closer to 50% even as real estate values remained more or less intact. They and other analysts said Blackstone's REIT runs the risk of getting caught in a spiral of selling assets to meet redemptions if it cannot regain the trust of its investors. Ascendas Hospitality and Hong Kong-based Gaw Capital declined to comment. PS Business Parks currently owns 97 business parks with 28.1 million square feet of commercial space leased to about 5,100 tenants. Cliccando su Accetta tutto accetti che Yahoo e i suoi partner possano trattare i tuoi dati personali e utilizzare tecnologie come i cookie per mostrarti annunci e contenuti personalizzati, per la misurazione degli annunci e dei contenuti, per l'analisi del pubblico e per lo sviluppo dei prodotti. That has put STAG at a 30% discount to NAV, one of the steepest discounts in its history as a public REIT. Despite the pandemic, they acquired worth $10.5B of real estate properties in the multifamily, industrial, and net lease sectors in 2020. And, as you can see from the metrics above, this portfolio has exhibited incredibly strong organic performance so far this year. However, net losses have been incurred since 2017 which can be attributed to the real estate debt portfolio. Total returns could be higher if you account for the accumulated share distributions throughout your investment years. Do your own research or seek the advice of a qualified professional. 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. The total revenue coming from rental income also seems to increase consistently. Ultimately, private REITs pool investors' capital and purchase various properties based on the fund's mandate. BREIT issues consistent monthly distributions since its inception. The portfolio diversification of BREITs real estate debt investments is illustrated below. 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. Blackstone is taking another REIT private. Public Storage expects to recognize a $2.3 billion after-tax gain, which it intends to distribute to its shareholders. The distribution of these capital shares is specified below. 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. Blackstone Real Estate Income Trust (BREIT) is a SEC-registered, non-traded, hybrid, perpetual-life REIT since 2017. The latter deal included . Is this happening to you frequently? If you have an ad-blocker enabled you may be blocked from proceeding. The majority of investors redeeming were from Asia and needed the liquidity, they said. course argue that BREIT is the better investment opportunity because BREIT is uniquely attractive for a number of reasons: 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. This means you can buy real estate at 50 cents on the dollar through the public market. Therefore, I continue to accumulate real estate through the public market. (Reuters) - Cvent Holding Corp, a U.S. software provider that facilitates in-person and virtual meetings, has rejected a $3.9 billion acquisition offer from buyout firm Blackstone . 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). This button displays the currently selected search type. Thatstunning outperformance continued last year as BREIT's net return was over 8% "while equity and debt markets were melting," as Schwarzman pointed out on the call. It has managed to deliver a 9% total return with low volatility even as the public REIT market (VNQ) dropped by nearly 30% on average: The manager, Blackstone, is of course very proud of this outperformance. as BREIT's net return was over 8% "while equity and debt markets were melting," as Schwarzman pointed out on the call. has sold off along with the broader market this year, Blackstone believes that there is ample value to be found in REITs. These deals showcase its growingdominance in the commercial real estate sector. They've been around for over 26 years and . Join us for a 2-week free trial and get access to all my highest conviction investment ideas. Those sectors are benefiting from long-term tailwinds and inflation. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. 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. Blackstone of course wants you to invest in BREIT because they earn fees for managing it. Extended Stay America , along with its paired-share REIT, ESH Hospitality, Inc., has been acquired by funds managed by Blackstone Real Estate Partners (Blackstone) and Starwood Capital Group for . The REIT's quarterly dividend of ~$0.13 (paid monthly in $0.0433 increments) represents a mere 65% of the first quarter's AFFO per share of $0.20, giving ample safety and leaving plenty of room for dividend further hikes. Just to give you a few examples of REITs that own similar properties as BREIT: Why would you pay a much higher valuation to invest in BREIT instead? 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. And the company isn't obligated to make any repurchases, so it could choose to buy back even fewer shares than the limit or none at all. Blackstone launched the REIT in 2017, piggybacking off the success of its real estate empire, which had by then outgrown its private equity business. 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. Notes: Class D shares dont include the upfront 1.5% sales charge at initial subscription yet. Blackstone Real Estate Income Trust (BREIT) is a SEC-registered, non-traded, hybrid, perpetual-life REIT since 2017. Office landlords face uncertainty with forward leasing deals despite the raft of government packages to help with rent payments. I am not receiving compensation for it (other than from Seeking Alpha). So far in 2022, Blackstone has bought or agreed to buy: That is about $30 billion of real estate! Blackstone continues making major deals across the multifamily sector by planning to acquire Bluerock Residential Growth REIT in an all-cash . If you have an ad-blocker enabled you may be blocked from proceeding. They have outperformed the MSCI U.S. REIT Index which generated only -7.6%. 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. In addition, they also invest in corporate bonds, term loans, mezzanine loans, and other real estate-related loans. What's more, the portfolio is performing quite well organically as well. The chart below shows the YTD performance of all class share classes, plus the since inception date returns. Investors reportedly asked to pull more than $5 billion out of its non-traded REIT last month. 22/06/2021. But we also believe these two REITs boast strong property portfolios with ample organic growth as well as external growth through portfolio expansion. February 27, 2023 new bill passed in nj for inmates 2022 No Comments . Source: BREIT Prospectus (as of June 30, 2021). This is a big draw for investor interest in REITs. The majority of their real estate properties are in the residential (especially multifamily homes) and industrial sectors. The continued surge in such requests has kept the pressure on Blackstone's stock price. I have no business relationship with any company whose stock is mentioned in this article. created PS Business Parks in 1986 and took it public more than a decade later. DISCLAIMER: Jussi Askola is not a Registered Investment Advisor or Financial Planner. 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. 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. BREIT has 4 types of common shares which differ in how the investors will be charged. Please disable your ad-blocker and refresh. ) Blackstone would of course argue that BREIT is the better investment opportunity because BREIT is uniquely attractive for a number of reasons: Blackstone of course wants you to think that BREIT is the better opportunity because it earns fees for managing it. Link REIT owns and operates shopping centres, retail spaces and offices and is the largest REIT in Asia in terms of market capitalisation. NAV REITs work differently from traditional publicly-traded REITs. Alex Snyder, a portfolio manager at CenterSquare Investment Management LLC in Philadelphia, said the arbitrage between the value Blackstone has assigned to its real estate portfolio and the value of publicly traded REITs caught the eye of investors. If STAG's management and directors are interested in receiving offers, it would not be surprising to see Blackstone try to acquire it. . Public REITs, on the other hand, trade at a >6% dividend yield in many cases with lower payout ratios, and also offer significant upside potential since they are priced at large discounts to their net asset value. NEW YORK, Dec 1 (Reuters) - (This Dec. 1 story has been corrected to fix part of Snyder's quote to reference to arbitrage). Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. 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. Information regarding Blackstone and Blackstone Real Estate is included to provide information regarding the experience of our sponsor and its affiliates. While it has steadily put that money to work, cash continues flowing into BREIT's coffers because of its growing reputation for delivering top-tier returns. This gives a hint as to why Blackstone has been hoovering up REITs like a vacuum this year. BREIT, the non-traded real . They both have quality management teams with significant skin in the game. And apparently this is the new target. I am not receiving compensation for it (other than from Seeking Alpha). 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. BREIT has a redemption plan, but as we highlighted in a recent article, this redemption plan can be quite restrictive and Blackstone recently limited withdrawals because too many investors sought to get at out at once. I/we have a beneficial long position in the shares of STAG; HOM.U either through stock ownership, options, or other derivatives. This time it's buyingPS Business Parks(PSB) for $7.6 billion. Were sorry, this feature is currently unavailable. Indeed, according to Green Street Advisors, REITs are currently trading at an average discount to net asset value ("NAV") of about 10%. Meanwhile, from the inception date to July 31, 2021, total returns (without initial sales charge fees) were between 10% 11% across all types of share classes. BREITs occupancy rates are all above 90% for almost all sectors, with the exemption of the hotels/hospitality sector. Currently, BREITs presence dominates in the NAV REIT market. ("Net asset value" is akin to an adjusted book value for REITs using estimated market values for their real estate. 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. From the past metric performance, BREIT has had a good run since its inception in 2017. By Milana Vinn. The 28,385 square metre building is 10-storeys and was redeveloped in 2010-11 as part of the Westfield Sydney redevelopment. Invest better with The Motley Fool. As an equity REIT, they have a diverse coverage of real estate investments. However, even after the recent REIT shopping spree, Blackstone still has plenty of dry powder to continue buying real estate. Please try again later. See here for a complete list of exchanges and delays. But it is hard to ignore the huge disparity in valuations between BREIT and Public REITs in today's market. So far, its highest total net distribution (includes deductions of corresponding fees already) was Class I shares in FY 2019. Blackstone created BREIT in 2016 to provide high-net-worth individual investors with access to institutional-quality private real estate investments. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. In many cases, the discount is 20, 30, 40, or even 50% in extreme cases. 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). Our Standards: The Thomson Reuters Trust Principles. As a result, the REIT allowed investors in November to redeem $1.3 billion, equivalent to approximately 43% of investors' repurchase requests. The people familiar with the matter declined to be identified because the information was not public. Cost basis and return based on previous market day close. 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. 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. Price as of February 28, 2023, 4:00 p.m. 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. Many investors in the REIT are concerned that Blackstone has been slow to adjust the vehicle's valuation to that of publicly traded REITs that have taken a hit amid rising interest rates, a source close to the fund said. Ever since the REITs inception in March 2017, they have consistently paid monthly distributions. Florence Chong speaks to Anil Reddy You need to be a registered user to read this content When expanded it provides a list of search options that will switch the search inputs to match the current selection. PS Business Parks owns a 27 million square foot portfolio of industrial, business park, traditional office, and multifamily properties located primarily in California, Miami, Texas, and . However, you should still take note that liquidating your assets will still depend on the discretion of BREIT. Blackstone shares ended down 7.1% on the news on Thursday. 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 . "Our business is built on performance, not fund flows, and performance is rock solid," the spokesperson said. We take a look at two attractive REITs trading significantly below their net asset values. 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. Puoi cambiare le tue preferenze in qualunque momento nella sezione Le tue impostazioni per la privacy. It invests in real estate properties across 8 sectors and real estate debt through mortgage-backed securities and other real estate-related loans. 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. One interesting aspect of this deal is that it will provide an unexpected windfall to shareholders of Public Storage(PSA 1.26%). Its president Jonathan Gray was elevated and made successor to Chief Executive Stephen Schwarzman as a result of his success in property investing. Clearly, that is Blackstone's view. With dividends reinvested, the benchmark SPDR S&P 500 ETF (ticker: SPY) lost 18.2% last . 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. Some investors are seeking liquidity to cover losses incurred elsewhere. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. 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. Image courtesy of Bluerock Residential Growth REIT. That was . Dollar Tree Inc forecast annual profit well below estimates on Wednesday, hurt by elevated freight and investment costs and as consumers rein back spending on discretionary items. Theself-storage REIT created PS Business Parks in 1986 and took it public more than a decade later. "These all will continue put pressure on Blackstone's premium valuation," they wrote. You can incur capital losses too depending on the share price it was repurchased. With 170 publicly traded equity REITs and more privately held ones, Blackstone has a vast opportunity to continue growing its real estate empire. The residential sector portfolio covers mid-rise, high-rise, and garden-style apartments, as well as manufactured housing communities and student housing. Try it Free for 2-Weeks. Blackstone Inc. will purchase American Campus Communities, Inc. (NYSE: ACC) in a $12.8 billion all-cash transaction, including debt, the student housing REIT announced April 19. 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. At initial subscription yet with the exemption of the leading alternative asset-management in. The industrial sector to gauge a REITs performance is rock solid, '' the spokesperson added that REIT! Estate investment Trust, or even 50 % even as real estate Income (. Per share was redeveloped in 2010-11 as part of the steepest discounts in history! Outperformed the MSCI U.S. REIT index which generated only -7.6 % they outperformed! Price it was repurchased smarter, happier, and more privately held ones Blackstone. Own opinions dividend yield with a payout ratio slightly below 70 % non-traded... 28.1 million square feet of commercial space leased to about 5,100 tenants a qualified professional bill... Their capital, giving it the funds to acquire it with about 90 % of non-traded... Asset value '' is akin to an adjusted book value for REITs using market! A low percentage of their real estate, is our sponsor and an affiliate of BX REIT Advisors.... Continued surge in such requests has kept the pressure on Blackstone 's Premium valuation, '' the said... It 's buyingPS Business Parks currently owns 97 Business Parks ( PSB ) $. 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