The asset manager is buying so aggressively because REIT valuations are significantly below the private market valuations of their real estate. Asset management giant Blackstone (BX) boasts a portfolio of assets under management reaching nearly $1 trillion, made up largely of real estate. JOIN THE CONVERSATION. 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. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Here are 4 of the critical parameters you should look at to measure the companys operating performance: BREITs total equity continues to increase as its investment portfolio expands across diverse sectors. 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. To liquidate their assets, BREIT must repurchase their shares, which is not guaranteed. For a Limited-Time - You can join Seeking Alphas #1 community of real estate investors at the Lowest-Rate-Ever-Offered. Currently, Blackstone has a market capitalization of $66.78 billion. 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. Mortgage REITs . BREIT is a REIT where shares are held by investors, but those shares aren't traded. This means you can buy real estate at 50 cents on the dollar through the public market. BREIT has 4 types of common shares which differ in how the investors will be charged. STAG is a ~$10 billion enterprise value industrial REIT specializing in higher yielding, single-tenant net leased properties largely in secondary and tertiary markets. 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. 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. ), And this is based on conservative estimates of property values. Just a month after, it grew to 1,508 properties. . Residential, specifically multi-family homes, bring the most rental revenue to BREITs portfolio, followed by the industrial sector. 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. That means Blackstone will undoubtedly continue making headline-grabbing deals. The information in his articles and his comments on SeekingAlpha.com or elsewhere is provided for information purposes only. Click here to learn more!. Bellagio (NV), MGM Grand (NV), & Mandalay Bay (NV). They claim that, unlike public REITs, BREIT is uncorrelated with the public stock market because it is a non-listed real estate investment vehicle. Blackstone Real Estate Income Trust (B REIT) has agreed to acquire all of the outstanding shares of common stock of Resource REIT(REIT) for $14.75 per share in an all-cash transaction valued at $3.7 billion.. Write by: It still has a lot of dry powder after its latest deal, suggesting its shopping REIT shopping spree could continue. It is also expensive to buy and sell, hurting your real returns, and BREIT always needs to keep some liquidity to meet redemptions, and this ultimately hurts returns even further. Blackstone's non-traded REIT, BREIT, has agreed to acquire Preferred Apartment Communities for $25 a share, or $5.8 billion. I wrote this article myself, and it expresses my own opinions. To give you an example, at High Yield Landlord, we hold an international Portfolio with REITs from 6 different countries. Blackstone shares ended down 7.1% on the news on Thursday. The sale was part of Blackstone's acquisition of the Scentre Group office portfolio in August 2019 and Link's financing was completed late last week. NEW YORK, Dec 1 (Reuters) - (This Dec. 1 story has been corrected to fix part of Snyder's quote to reference to arbitrage). Update 2018-05-11: Blackstone reports that it's leverage has increased from below-average 41% to above average 60% (average for core plus is 50%). I wrote this article myself, and it expresses my own opinions. 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). Link REIT owns and operates shopping centres, retail spaces and offices and is the largest REIT in Asia in terms of market capitalisation. Blackstone has earned a reputation for being one of the top real estate investors in the world. That was almost 70% of all the capital raised by non-traded REITs that year. Learn More. But the better way to gauge a REITs performance is through its FFO. However, even after the recent REIT shopping spree, Blackstone still has plenty of dry powder to continue buying real estate. It is heavily invested in rapidly growing sunbelt markets. 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. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. 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. 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. This button displays the currently selected search type. 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. 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. Making the world smarter, happier, and richer. Note that this is an investment-grade rated company with a very strong track record and it is not in any distress. 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. If you dont like it, we wont charge you a penny! In a regulatory filing last month, Blackstone said that it has secured $24.1 billion of commitments for its latest real estate fund called Blackstone Real Estate Partners X. However, it recovered by the end of 2020 and soared in the first half of 2021. With 170 publicly traded equity REITs and more privately held ones, Blackstone has a vast opportunity to continue growing its real estate empire. However, they'll lose the exposure to the business park sector, which contributed 4% of Public Storage's annual funds from operations. As a result, the REIT allowed investors in November to redeem $1.3 billion, equivalent to approximately 43% of investors' repurchase requests. 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. But I think that public REITs are today far more opportunistic than BREIT. Driving those returns was the company's thematic investment approach, currently focused on rental housing and industrial real estate in the Southern and Western parts of the country. More investors are entrusting it with more of their capital, giving it the funds to acquire more real estate. I don't know many asset classes that perform -- outperform indexes by 3,000 basis points. Information regarding Blackstone and Blackstone Real Estate is included to provide information regarding the experience of our sponsor and its affiliates. The U.S. real estate investment trust, or REIT, sector was hit abnormally hard during the 2022 bear market. Public REITs are liquid and naturally, this will result in some volatility, but at least, you are not lying to yourself, thinking that something isn't volatile just because it isn't traded. Blackstone is taking another REIT private. The purchase will give Blackstone a large-scale portfolio of high-quality, flexible real estate in some of the country's best markets. Goldman Sachs mulls deal options after consumer flop, TotalEnergies buys CEPSAs upstream assets in Abu Dhabi, Reporting by Chibuike Oguh and Herb Lash in New York Select REIT Total Return Index 22.19% decline over the same period. ET, This 4.5%-Yielding Dividend Stock Has $50 Billion to Continue its Real Estate Buying Binge, 1 Roaring Dividend Stock That's Leading the Market Recovery. (the "Adviser"). Global investment firm Blackstone-sponsored Nexus Select Trust has filed the draft paper with market regulator Sebi to launch India's first public issue of retail REIT to raise around US$ 500 million (about Rs 4,000 crore), sources said. While they will be a headwind for Blackstone's growth in the near term as the company works through its backlog, they aren't due to any issues with that investment vehicle. Join us for a 2-week free trial and get access to all my highest conviction investment ideas. The people familiar with the matter declined to be identified because the information was not public. Blackstone Group has been on an aggressive REIT buying spree in the last few years. Contrary to traded REITs, NAV REITs are valued daily or monthly with a limited liquidity period to avoid market volatility especially with factors that do not directly relate to real estate. Here are some examples: BSR PresentationBSR PresentationBSR PresentationBSR Presentation. The stockholder distribution across the class shares is shown below. This button displays the currently selected search type. Blackstone is the 1000-pound gorilla in any real estate room. For example, Blackstone provides the option to repurchase shares from investors once a month. BREIT is a hybrid REIT because it deals with both. The asset management behemoth boasts roughly $50 billion in dry powder capital earmarked for global real estate, including a new real estate fund with over $24 billion in commitments from investors so far. 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. HPA has a portfolio of over 17,000 homes throughout the U.S. 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. But they also plan to permeate the European real estate market and certain other countries. Published - Tuesday, 20 Dec, 2022. Nexus Select Trust has a portfolio of 17 operational shopping malls . The distribution of these capital shares is specified below. The deal values the, One interesting aspect of this deal is that it will provide an unexpected windfall to shareholders of. 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%. 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 helped it turn into an asset management behemoth. Multifamily REIT Preferred Apartment Communities announced . "Leasing inspections are still occurring [but] most organisations are delaying the decision-making process," Mr Ballantyne said. Este botn muestra el tipo de bsqueda seleccionado. Blackstone's (BX) public non-listed REIT, BREIT, has been one of the best-performing REITs of this year. Despite the pandemic, they acquired worth $10.5B of real estate properties in the multifamily, industrial, and net lease sectors in 2020. Reit in Asia in terms of market capitalisation of $ 66.78 billion aren & # x27 ; t.! 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