Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. The acquisition represents about 1.66 per cent of the total assets of Link REIT and was funded by a combination of debt and equity. Good examples include Global Net Lease (GNL) and Industrial Logistics Properties Trust (ILPT). The curbs came because redemptions hit pre-set limits, rather than Blackstone setting the limits on the day. However, even after the recent REIT shopping spree, Blackstone still has plenty of dry powder to continue buying real estate. This is a big draw for investor interest in REITs. This is the most important reason. 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 . Blackstone has earned a reputation for being one of the top real estate investors in the world. 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. What's more, the portfolio is performing quite well organically as well. More investors are entrusting it with more of their capital, giving it the funds to acquire more real estate. 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. These deals showcase its growing, dominance in the commercial real estate sector, However, even after the recent REIT shopping spree, Blackstone still has plenty of dry powder to continue buying real estate. 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. The information in his articles and his comments on SeekingAlpha.com or elsewhere is provided for information purposes only. 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. With public REITs, you have much more flexibility. 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. Blackstone Mortgage Trust is not owned by hedge funds. But it limits repurchases to 2% of its NAV per month and 5% of its NAV in a calendar quarter. Please. The surge in redemptions at BREIT continues to get a lot of attention. BREIT is a hybrid REIT because it deals with both. Having invested in data centres in the US and Europe, Blackstone has eyes on Asia-Pacific - starting with India. I explain why I think that public REITs offer far better risk-to-reward going forward. Blackstone's purchase of American Campus makes student housing a fully privately held asset class in the US. Associate Director at Atlantic Group. BREIT issues consistent monthly distributions since its inception. 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. 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. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. 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. The company reports its financial statements and regular updates through SEC filings for public reference. The continued surge in such requests has kept the pressure on Blackstone's stock price. Public Storage expects to recognize a $2.3 billion after-tax gain, which it intends to distribute to its shareholders. I have no business relationship with any company whose stock is mentioned in this article. Write by: But we also believe these two REITs boast strong property portfolios with ample organic growth as well as external growth through portfolio expansion. Rising interest rates weigh on real estate values because they make financing properties more expensive. Blackstone Real Estate Income Trust, Inc. (BREIT) has real estate investments in diverse sectors such as residential, industrial, office, storage, and hotel/hospitality. Select REIT Total Return Index 22.19% decline over the same period. Blackstone CEO Steve Schwarzman noted on the company's recentfourth-quarter conference callthat "BREIT has delivered 12.5% net returns annually since inception six years ago for its largest share class, earning over three times the public REIT index.". 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. That means Blackstone will undoubtedly continue making headline-grabbing deals. Those returns will eventually draw more investors to BREIT. It is a lot cheaper and offers better upside potential going forward. 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. I don't know many asset classes that perform -- outperform indexes by 3,000 basis points. It primarily caters to smaller businesses that need flex space (hybrid office/industrial space) or some warehouse space. Schwarzman took home more than $1.27 . Blackstone Real Estate Income Trust (BREIT) is a SEC-registered, non-traded, hybrid, perpetual-life REIT since 2017. A majority (by 89%) of BREITs income comes from rental revenues across a diverse set of asset classes much of it comes from residential and industrial sectors. That left it with $36.3 billion of dry powder. This time it's buyingPS Business Parks(PSB) for $7.6 billion. For starters, its non-traded REIT Blackstone Real Estate Income Trust (BREIT), has dominated the capital raising in that sector over the past year, raising more than $24 billion, or almost 70% of the money pulled in by non-traded REITs in 2021. Invest at least 75% of total assets in real estate or cash. Plus, the REIT has over 40% upside to NAV. BREIT has a diverse real estate property portfolio. Raven Select Service Portfolio, Hyatt Regency Atlanta (GA), JW Marriott San Antonio Hill Resort (TX), etc. Please. High Yield Landlord is managed by Leonberg Capital. This means that there is an external asset manager, in this case, Blackstone, that takes care of the management in exchange for fees. 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. 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. 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. Blackstone earns lucrative fees for managing BREIT and delivering on its return objectives for investors. Price as of February 28, 2023, 4:00 p.m. Though Blackstone sometimes acquires individual real estate properties, such as The Bellagio in Las Vegas, it more often seeks opportunities to scoop up whole portfolios that will move the needle. Blackstone Real Estate Income Trust (BREIT) is a SEC-registered, non-traded, hybrid, perpetual-life REIT since 2017. EmeryTech Office (CA) & Coleman Highline Office. US private equity giant Blackstone Group has defied market jitters and pulled off a mega sale of an office tower above the Westfield mall in Sydney's CBD to Hong Kong-based Link REIT for $683 million. Today, he is the author of "High Yield Landlord - the #1 ranked real estate service on 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. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Bellagio (NV), MGM Grand (NV), & Mandalay Bay (NV). Barclays analysts downgraded their rating of Blackstone's stock to "equal weight" from "overweight" and cut their price target to $90 from $98 on Friday. If you want full access to our Portfolio and all our current Top Picks, feel free to join us for a 2-week free trial at High Yield Investor. This is its first investment outside China. 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? Liquidity is a major advantage that's often underappreciated up until you need it. They are also open to venturing into healthcare and data center sectors. For a Limited-Time - You can join Seeking Alphas #1 community of real estate investors at the Lowest-Rate-Ever-Offered. The latter deal included . I wrote this article myself, and it expresses my own opinions. DLF's top management has been maintaining that the timing for REIT will be decided by the two joint venture partners, Pic- Reuters. They explain on a conference call earlier this year that: "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. Join us for a 2-week free trial and get access to all my highest conviction investment ideas. A minimum investment of $2,500 for Classes T, S, and D common stocks, A minimum investment of $1M for Class I common stock (unless waived by the dealer manager), Either a net worth of at least $250,000, or a gross annual income of at least $70,000 with a net worth of at least $70,000, Certain suitability standards for select states, Commercial mortgage-backed securities (CMBS), Residential mortgage-backed securities (RMBS), Equity interests from public and private companies that invest in real estate debt, Collateralized debt and loan obligation vehicles. February 27, 2023 new bill passed in nj for inmates 2022 No Comments . Last REIT standing. JOIN THE CONVERSATION. "Leasing inspections are still occurring [but] most organisations are delaying the decision-making process," Mr Ballantyne said. The private equity giant still has a lot of dry powder to continue shopping. Global investment firm Blackstone-sponsored Nexus Select Trust has filed the draft paper with market regulator Sebi to launch India's first public issue of retail REIT to raise around US$ 500 million (about Rs 4,000 crore), sources said. This time it's buying PS Business Parks . If you dont like it, we wont charge you a penny! Blackstone is also active in credit, infrastructure, hedge funds, insurance, secondaries, and growth . A real estate private equity firm with over 20 years of successful performance, are currently looking to add a Property Accountant to their team. 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. Looking for more investing ideas like this one? We spend 1000s of hours and over $100,000 per year researching the market for the most profitable investment opportunities and share the results with you at a tiny fraction of the cost. 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). Instead, the sell-off in its stock stemming from BREIT looks like a great buying opportunity for long-term investors to add to their position. The company has a market cap of $3.67 billion, a P/E ratio of 14.90 and a beta of 1.31. 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. Clearly, the company will buy whatever it views as the most attractive viable deal. Dividends are paid and capital gains, if any, are shared. Many non-traded REITs suspended their repurchase programs during the early days of the pandemic. Total returns could be higher if you account for the accumulated share distributions throughout your investment years. 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. Since its inception in 2017, BREIT has consistently issued monthly distributions to its stockholders. Were sorry, this feature is currently unavailable. Blackstone shares ended down 7.1% on the news on . Blackstone is taking another REIT private. I have no business relationship with any company whose stock is mentioned in this article. The deal values the, One interesting aspect of this deal is that it will provide an unexpected windfall to shareholders of. Investment advisors assess the shares and report them in terms of fair value, like how mutual funds work. While commercial real estate itself is performing extraordinarily well this year and retaining its value, publicly traded REITs have shed around 20% of their value and now mostly trade at discounts to NAV. The majority of investors redeeming were from Asia and needed the liquidity, they said. Click here to learn more!. Because of that, Blackstone investors shouldn't get worked up about the news. 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. 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. The Motley Fool has a disclosure policy. That was . 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. Please be aware of the risks associated with these stocks. 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. In many cases, the discount is 20, 30, 40, or even 50% in extreme cases. 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. Bill Bayless, ACC co-founder and CEO, said the transaction marked the culmination of a "pioneering quest to transform the student housing . Matthew DiLallo has positions in Blackstone and has the following options: short June 2023 $60 puts on Blackstone. It has a strong balance sheet with mostly fixed-rate debt. Ultimately, private REITs pool investors' capital and purchase various properties based on the fund's mandate. The asset manager partners with big money players like pension funds and insurance companies to provide strong returns and steady income. You can buy or sell with minimal fees with just a few clicks of mouse. Under the terms of the agreement, B REIT will acquire the REIT 's portfolio of multifamily, garden-style assets comprised of 42 apartment communities totaling more than 12,600 units. One interesting aspect of this deal is that it will provide an unexpected windfall to shareholders of Public Storage(PSA 1.26%). LONDON (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. I think that it is inferior and yet it is a lot more expensive. Jika diperluas, akan tampil daftar opsi pencarian yang akan mengganti input pencarian agar sesuai dengan pilihan saat ini. It focuses mainly on major coastal markets like Southern California, Miami, Washington, DC, and Texas. This covers BREITs direct property investments, equity in public and private real estate-related companies, and unconsolidated investments. . This implies that the REIT was able to sell properties at a significant gain from its original purchase price. The index is down 17%, we were up 2.3%. 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. In the . 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. To make the world smarter, happier, and richer. Certain parameters from financial statements will tell you how the company managed its investments through the ups and downs of the business cycle. The company will likely continue to battle this headwind until it works through its current backlog. That has put STAG at a 30% discount to NAV, one of the steepest discounts in its history as a public REIT. Invest better with The Motley Fool. Nonetheless, they fueled investor concerns about the future of the REIT, which makes up about 17% of Blackstone's earnings. Become a Passive Landlord with our 8% Yielding Real Estate Portfolio. By 2030, the institutions may hold some 7.6 million homes, or more than 40% of all single-family rentals on the market, according to the 2022 forecast by MetLife Investment Management. Cost basis and return based on previous market day close. 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. Trust is not owned by hedge funds, insurance, secondaries, and unconsolidated investments opsi pencarian akan. Returns and steady Income the company reports its financial statements and regular updates through filings!, hedge funds diperluas, akan tampil daftar opsi pencarian yang akan mengganti input pencarian sesuai! 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