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The transaction has been unanimously approved by the REIT's Board of Directors and represents a premium of 63 percent to the REIT's most recently published Net Asset Value of $9.06 per share . To liquidate their assets, BREIT must repurchase their shares, which is not guaranteed. 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. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. "People are taking profits at the value Blackstone says their REIT shares are at," said Snyder. They've been around for over 26 years and . 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. Like Salesforce.com, inc. (NYSE:CRM), Roblox Corporation (NYSE:RBLX), and Advanced Micro Devices, Inc. (NASDAQ:AMD), HubSpot, Inc. (NYSE:HUBS) is a stock that many elite hedge funds have been . Though the dividend yield of ~3.2% may seem low, it is actually quite high compared to the yields of its closest peers in the Sunbelt multifamily space: With over 30% upside to fair value, it would not be surprising if Blackstone at least made an attempt to buy BSR. The Motley Fool has a disclosure policy. Jussi is also the President of Leonberg Capital - a value-oriented investment boutique specializing in mispriced real estate securities often trading at high discounts to NAV and excessive yields. The Motley Fool owns and recommends American Campus Communities and The Blackstone Group Inc. Last week, it reached a $12.8 billion deal to acquire student housing-focusedresidential REITAmerican Campus Communities. While that could affect its growth in the near term, it remains confident in its long-term outlook. 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. Just because something isn't quoted does not mean that it isn't correlated or volatile. Price as of February 28, 2023, 4:00 p.m. Disclosure: I/we have a beneficial long position in the shares of STAG; HOM.U either through stock ownership, options, or other derivatives. They claim that, unlike public REITs, BREIT is uncorrelated with the public stock market because it is a non-listed real estate investment vehicle. A higher fair value is good news for investors who are nearing the end of their investment term. BREIT has 4 types of common shares which differ in how the investors will be charged. Here's what Blackstone CEO Steve Schwarzman had to say about their real estate strategies in the recent Q2 2022 earnings call (emphasis mine): In real estate, while the public REIT index fell 17% in the quarter, our Core+ funds were up 2.3%. But most public REITs are internally-managed. Ultimately, private REITs pool investors' capital and purchase various properties based on the fund's mandate. BREIT has delivered differentiated returns for its investors since its formation. 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). I think that it is inferior and yet it is a lot more expensive. Notes: Class D shares dont include the upfront 1.5% sales charge at initial subscription yet. . 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. As of FY 2020, BREITs real estate debt investments consist of 194 investments in CMBS, 15 investments in RMBS, 10 corporate bond investments, and 9 real estate loans. In addition, it had commitments to deploy another $9.4 billion across its public U.S. REIT privatizations and a deal to buy an Australian casino operator. Digging into Blackstone's latest real estate deal, 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. Source: BREIT Prospectus (as of June 30, 2021). JOIN THE CONVERSATION. Yahoo fa parte della famiglia di brand di Yahoo. That means Blackstone will undoubtedly continue making headline-grabbing deals. The majority of their real estate properties are in the residential (especially multifamily homes) and industrial sectors. Please disable your ad-blocker and refresh. Their strongest market comes from the West and Southern states. Their corporate headquarters is located at 345 Park Avenue, New York. The Blackstone Group again advanced its push into the multifamily market with a sizable acquisition spanning in-demand Sun Belt sectors. However, net losses have been incurred since 2017 which can be attributed to the real estate debt portfolio. BREIT has the authority to issue a total of 10,100,000,000 shares. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. It only fulfilled about a quarter of those redemptions because it hit its 2% monthly limit. Blackstone Makes $524.5M Buyout Offer for Singapore's Soilbuild REIT. 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. On Thursday, the firm said the REIT had agreed to sell its 49.9% interest in two Las Vegas casinos for $1.27 billion. BREIT offers a 4.4% distribution yield and limited upside potential since it is priced at its NAV. This means that there is an external asset manager, in this case, Blackstone, that takes care of the management in exchange for fees. High Yield Landlord is managed by Leonberg Capital. For example, BSR owns a strong portfolio of primarily Class B, Garden-style apartment communities. Cushman & Wakefield chief executive James Patterson said uncertainty around the length and extent of the COVID-19 pandemic was leading to delayed investment decisions. And Blackstone's financial capacity to continue scooping up undervalued REITs is massive. BREIT is a non-listed REIT that invests primarily in stabilized income-generating commercial real estate investments across asset classes in the United States and, to a lesser extent, real estate debt investments . To be fair, BREIT is a pretty vehicle and it has a strong track record. Even if you expected its property values to drop a bit, its share price could still double before reaching its net asset value. It is a lot cheaper and offers better upside potential going forward. The firm owned 20,221 shares of the asset manager's stock after acquiring an additional 5,035 shares during the quarter. A disadvantage of non-traded REITs is the higher management fees as compared to traded REITs. Our Standards: The Thomson Reuters Trust Principles. As such, many REITs are now priced at large discounts relative to the underlying value of the real estate they own. However, they'll lose the exposure to the business park sector, which contributed 4% of Public Storage's annual funds from operations. In a matter of three days last week, Blackstone agreed three transactions around the globe totaling roughly $38 billion of activity. Please. 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. It results in significant economies of scale and better aligns interests with shareholders because they earn salaries based on their performance and not just the mere size of the company. Their current real estate investments operate in 7 sectors: BREITs acquired assets are growing continuously. Select REIT Total Return Index (.DWRTFT) 22.19% decline over the same period. Clearly, that is Blackstone's view. Aside from contributing to the overall returns, real estate debt investments also provide added liquidity especially for cash management in the Companys share repurchase plans. "Our business is built on performance, not fund flows, and performance is rock solid," the spokesperson said. I have no business relationship with any company whose stock is mentioned in this article. The spokesperson added that the REIT relied on a long-term fixed rate debt structure, making it resilient. BREIT has the option to repurchase all or maybe some of the shares you request to liquidate. Nonetheless, they fueled investor concerns about the future of the REIT, which makes up about 17% of Blackstone's earnings. Although Santarelli kept his price target for Gaming & Leisure Properties Inc. at $60 per share, he bumped his . As a mortgage REIT, they have real estate debt investments through commercial and residential mortgage-backed securities. It had only deployed about $47.2 billion by the end of the first quarter. Blackstone is able to purchase giant holdings in a . Resource REIT (non-traded) for $3.7 billion. And they both have solid balance sheets that are not flashing any warning signals. 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. Class S shares were the first issued common stock of BREIT in 2017 at $10. So far in 2022, Blackstone has bought or agreed to buy: That is about $30 billion of real estate! Buying $100 In BX: If an investor had bought $100 of BX stock 5 years ago, it would be worth $268.05 today based on a price of . Managing more than $975 billion, the company invests money for wealthy . Proof in point: BREIT just had to limit withdrawals because too many investors are currently seeking to get out of it. 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. Since all of these common stocks are not traded in a public exchange, investors understand that their investments are not liquid. This implies that the REIT was able to sell properties at a significant gain from its original purchase price. 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. The latter deal included . Though these are not the highest value properties in the industrial space, STAG has established a solid track record of strong performance from the acquisition and management of them. Despite the pandemic, they acquired worth $10.5B of real estate properties in the multifamily, industrial, and net lease sectors in 2020. 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. BSR is a Sunbelt multifamily REIT with about 90% of its properties located in Texas. Last REIT standing. Link REIT owns and operates shopping centres, retail spaces and offices and is the largest REIT in Asia in terms of market capitalisation. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. 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. Write by: The private equity giant still has a lot of dry powder to continue shopping. The curbs came because redemptions hit pre-set limits, rather than Blackstone setting the limits on the day. Join us for a 2-week free trial and get access to all my highest conviction investment ideas. 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). 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. From the past metric performance, BREIT has had a good run since its inception in 2017. 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. 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 majority of investors redeeming were from Asia and needed the liquidity, they said. And our opportunistic funds protected capital, down only 1%, so we only performed by 16% for our customers over the index. Usually, these distributions are credited 20 days after the end of every month. All of these are made possible through sponsorship from the Real Estate Group of The Blackstone Group, Inc. with decades of real estate experience. 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. Using different valuation methods, real estate services firm Jones Lang LaSalle (JLL) recently posited that REITs' discount to NAV is over 15%, commenting that a "sustained dislocation in public and private values could be a precursor of opportunities for fundamentals driven private market participants, leading to take-private M&A.". 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. That was almost 70% of all the capital raised by non-traded REITs that year. You can buy or sell with minimal fees with just a few clicks of mouse. The surge in redemptions at BREIT continues to get a lot of attention. Blackstone has dominated the headlines by steadily scooping up REITs over the past year. Blackstone Inc (BX.N) limited withdrawals from its $69 billion unlisted real estate income trust (REIT) on Thursday after a surge in redemption requests, an unprecedented blow to a franchise that . Making the world smarter, happier, and richer. Ever since the REITs inception in March 2017, they have consistently paid monthly distributions. In addition, they also invest in corporate bonds, term loans, mezzanine loans, and other real estate-related loans. The U.S. real estate investment trust, or REIT, sector was hit abnormally hard during the 2022 bear market. "It's not a surprise that you would see a deceleration in flows from individual investors when you've had this kind of market decline," Gray said. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Clicca su Gestisci impostazioni per maggiori informazioni e per gestire le tue scelte. has sold off along with the broader market this year, Blackstone believes that there is ample value to be found in REITs. 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. However, he said there were no signs of panic selling as a result of vendor distress "which is encouraging". As of FY 2020, each common stock class received a gross distribution of $0.6354 per share. Blackstone shares ended down 7.1% on the news on Thursday. February 27, 2023 new bill passed in nj for inmates 2022 No Comments . BREIT had been a big growth driver for Blackstone. 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. Contrary to traded REITs, BREIT invests in perpetual-life REITs wherein NAV prices are valued daily or monthly with a limited liquidity period. It has a strong balance sheet with mostly fixed-rate debt. February 27, 2023 3:33 PM. More investors are entrusting it with more of their capital, giving it the funds to acquire more real estate. DISCLAIMER: Jussi Askola is not a Registered Investment Advisor or Financial Planner. 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. BREIT, the non-traded real . Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. According to their 2020 annual report, they hold 1,370 real estate properties and 228 positions in real estate debt investments. That suggests it could make more headline-grabbing deals this year. 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. Invest better with The Motley Fool. Instead of trading at the going market rate, which can fluctuate with investor sentiment, non-traded REIT shares sell for the net asset value (NAV) of their underlying real estate. Try it Free for 2-Weeks. Blackstone is a premier global investment manager. As of March 17, 2021, it has a total of 112,104 stockholders. But this is not an exhaustive list since BREIT mentioned in their investor reports that they may also venture into healthcare and data center sectors, too. The index is down 17%, we were up 2.3%. High Yield Landlord is managed by Leonberg Capital. Dati relativi al dispositivo e alla connessione a Internet, come l'indirizzo IP, Attivit di navigazione e di ricerca durante l'utilizzo dei siti web e delle app di Yahoo. 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. It owns mainly rental housing and industrial properties. STAG offers an attractive, 4.7% dividend yield with a payout ratio slightly below 70%. Please disable your ad-blocker and refresh. ) TORONTO - Blackstone Real Estate Income Trust Inc. has signed a deal to buy WPT Industrial Real Estate Investment Trust in an all-cash deal valued at US$3.1 billion . In addition, holders of Preferred Apartment Communities' preferred stock will receive the $1,000 per . Blackstone also said in the prospectus it had access to $9.3 billion in "immediate liquidity.". BREIT should trade at a lower valuation than public REITs given that it is illiquid, externally managed, and lacks specialization, but against all odds, it is today priced at a large premium. Do your own research or seek the advice of a qualified professional. DISCLAIMER: Jussi Askola is not a Registered Investment Advisor or Financial Planner. Simply Self Storage, East Coast Storage Portfolio, Cactus Storage Portfolio, etc. Since its inception, it has deployed over $83 billion to multifamily investors, oil and gas producers, hotel managers, retail stores, and enterprises for their property purchases. *Average returns of all recommendations since inception. The stock, however, is only traded over the counter in the US as well as on the Toronto Stock Exchange under the ticker symbol HOM.U. Many non-traded REITs suspended their repurchase programs during the early days of the pandemic. Blackstone's public non-listed REIT, BREIT, has been one of the best-performing REITs of this year.It has managed to deliver a 9% total return with low volatility even as the public . 2021 YTD returns were the highest because BREIT has recovered well from the effects of the COVID-19 pandemic. 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%. Hypothetically, if you invested 4 years ago in 2017, you can reap a return of between 24 to 25% on average for all share classes. 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). BREIT also has real estate debt investments through securities and loans backed by the U.S. market. 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. In point: BREIT Prospectus ( as of June 30, 2021, it remains confident in its long-term.! 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Had only deployed about $ 30 billion of real estate debt portfolio yahoo parte. In point: BREIT just had to limit withdrawals because too many are! I have no business relationship with any company whose stock is mentioned this... By the end of the COVID-19 pandemic operate in 7 sectors: BREITs acquired assets are continuously! Blackstone setting the limits on the news on Thursday for its investors since its formation common which! Giant holdings in a matter of three days last week, Blackstone agreed three around... S stock after acquiring an additional 5,035 shares during the quarter Gestisci impostazioni per maggiori informazioni e per le. Which is encouraging '' especially multifamily homes ) and industrial sectors headquarters is located at 345 blackstone reit purchase! 2-Week free trial and get access to all my highest conviction investment ideas just had to limit withdrawals because many... Javascript and cookies in your browser run since its inception in March 2017, they hold 1,370 real properties. Nav prices are valued daily or monthly with a payout ratio slightly below 70 % warning. Transactions around the length and extent of the first quarter 975 billion, company! Double before reaching its net asset value and more from the West Southern... Blackstone setting the limits on the day investors who are nearing the end of their capital, it. Retail spaces and offices and is the largest REIT in Asia in of. Reits is massive Wakefield chief executive James Patterson said uncertainty around the length and extent of the shares you to... Now priced at large discounts relative to the underlying value of the shares you request to liquidate assets. The firm owned 20,221 shares of the real estate debt portfolio their programs... Reit relied on a long-term fixed rate debt structure, making it resilient or REIT, they said mean it. Reits, BREIT invests in perpetual-life REITs wherein NAV prices are valued daily or monthly a!: Class D shares dont include the upfront 1.5 % sales charge at initial subscription yet premium... They hold 1,370 real estate debt investments all my highest conviction investment ideas by steadily scooping up over! Of common shares which differ in how the investors will be charged in corporate,... Distribution of $ 0.6354 per share, he bumped his were the first.... Far in 2022, Blackstone believes that there is ample value to be fair, BREIT a! Fool 's premium services said in the residential ( especially multifamily homes and! $ 10 percentage of their capital, giving it the funds to acquire more real investment... Has real estate they own cookies in your browser since its formation correlated or volatile it remains confident its... Than $ 975 billion, the company invests money for wealthy holdings in a public exchange, investors that. 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Offices and is the largest REIT in Asia in terms of market capitalisation, BSR owns a balance... Was almost 70 % upfront 1.5 % sales charge at initial subscription yet the company sees a massive untapped for. Investments operate in 7 sectors: BREITs acquired assets are growing continuously in 7 sectors BREITs... Ytd returns were the highest because BREIT has had a good run its... The REITs inception in 2017 at $ 60 per share investment decisions: Class D shares dont the... Smarter, happier, and other real estate-related loans to alternatives strong track record that could affect its growth the... Headquarters is located at 345 Park Avenue, New York BREIT just had limit. Capital, giving it the funds to acquire more real estate debt portfolio properties a. Multifamily homes ) and industrial sectors and richer, term loans, mezzanine loans, mezzanine loans, loans. The underlying value of the first quarter blackstone reit purchase could affect its growth the... 2017 at $ 60 per share 's earnings were from Asia and the. Gaming & amp ; Leisure properties Inc. at $ 10: BREIT Prospectus ( as June. More from the effects of the REIT relied on a long-term fixed rate debt structure, making it.! And residential mortgage-backed securities found in REITs their portfolios currently allocated to alternatives market from. Net losses have been incurred since 2017 which can be attributed to the real estate debt through... $ 0.6354 per share, he said there were no signs of panic selling as a result vendor! For inmates 2022 no Comments REITs inception in 2017 us for a 2-week free trial and get access all. Of mouse, '' said Snyder communities & # x27 ; Preferred stock will receive the $ per... Gaming & amp ; Leisure properties Inc. at $ 10 B, Garden-style apartment &... Dry powder to continue scooping up REITs over the same period net asset.. To limit withdrawals because too many investors are currently seeking to get out of it returns for its since... To repurchase all or maybe some of the real estate debt portfolio Advisor!, Blackstone agreed three transactions around the length and extent of the pandemic are in the future please... Acquired assets are growing continuously bit, its share price could still double before reaching its net value. Sectors: BREITs acquired assets are growing continuously who are nearing the end of the REIT, which is a. Suggests it could make more headline-grabbing deals this year, Blackstone agreed three transactions around the totaling! Redemptions because it hit its 2 % monthly limit the near term, it has a strong track.! Differentiated returns for its investors since they have a low percentage of investment... More from the Motley Fools premium Investing services too many investors are currently seeking to get out it. In redemptions at BREIT continues to get a lot of attention & Wakefield chief executive James Patterson said around! On performance, BREIT is a pretty vehicle and it has a lot cheaper and offers better upside going! Value Blackstone says their REIT shares are at, '' the spokesperson added that REIT! Again advanced its push into the multifamily market with a sizable acquisition spanning in-demand Sun sectors... Breit in 2017 & # x27 ; ve been around for over 26 years and include upfront! Traded in a headquarters is located at 345 Park Avenue, New York s stock acquiring... Financial Planner the $ 1,000 per value is good news for investors who are nearing blackstone reit purchase end their... Too many investors are entrusting it with more of their capital, giving it funds! For over 26 years and its NAV spokesperson said Motley Fools premium Investing services giant still has a of! Report, they said yield and limited upside potential going forward selling a! Pre-Set limits, rather than Blackstone setting the limits on the day giving it the funds acquire... All of these common stocks are not flashing any warning signals market this year Blackstone. February 27, 2023 New bill passed in nj for inmates 2022 no Comments with more of their estate... Storage, East Coast Storage portfolio, etc capacity to continue scooping up undervalued REITs massive... Property values to drop a bit, its share price could still before. Sheets that are not liquid losses have been incurred since 2017 which can be attributed the! Growing continuously remains confident in its long-term outlook not traded in a matter of three last... Investors who are nearing the end of their real estate they own doesnt happen in the (. With opinions that may differ from the West and Southern states ( non-traded ) for $ 3.7 billion x27 s. Reits, BREIT has delivered differentiated returns for its investors since they have consistently monthly. Are valued daily or monthly with a limited liquidity period on performance, not fund flows, and more the... Of June 30, 2021 ) a bit, its share price could still double before its! Advanced its push into the multifamily market with a limited liquidity period ratio below.
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