The information in his articles and his comments on SeekingAlpha.com or elsewhere is provided for information purposes only. This is to avoid market volatility especially with factors that do not directly relate to real estate. They were down a further 2% on Friday morning at $83.45. 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. 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.. 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. Because of that, Blackstone investors shouldn't get worked up about the news. BREITs real estate investment portfolio can be categorized into two real estate investments and real estate debt investments. 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. Liquidity is a major advantage that's often underappreciated up until you need it. Since its inception in 2017, BREIT has consistently issued monthly distributions to its stockholders. And, as you can see from the metrics above, this portfolio has exhibited incredibly strong organic performance so far this year. 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. I have no business relationship with any company whose stock is mentioned in this article. This button displays the currently selected search type. 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. It focuses mainly on major coastal markets like Southern California, Miami, Washington, DC, and Texas. CRE Herald. Three stocks that look particularly appealing considering their high-dividend yields and beaten-up share prices are Blackstone ( BX 0.30%), UMH Properties ( UMH 0.38%), and Mid-America Apartment . However, Blackstone's success in delivering differentiated returns will eventually become a magnet for investors once again. Our largest position, Vonovia (OTCPK:VONOY) (OTCPK:VNNVF), is the biggest landlord in Germany. 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 will often claim that BREIT is superior to public REITs because it supposedly provides better diversification benefits. As a result, it will receive about $2.7 billion in cash when the deal closes. 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. Asset management giant Blackstone (BX) boasts a portfolio of assets under management reaching nearly $1 trillion, made up largely of real estate. That left it with $36.3 billion of dry powder. Those returns will eventually draw more investors to BREIT. But they also plan to permeate the European real estate market and certain other countries. While its recently announced deals will utilize some more of that capital, additional money is likely to continue flowing into its coffers. Today, he is the author of "High Yield Landlord - the #1 ranked real estate service on Seeking Alpha. Usually, these distributions are credited 20 days after the end of every month. Office landlords face uncertainty with forward leasing deals despite the raft of government packages to help with rent payments. By Milana Vinn. A real estate private equity firm with over 20 years of successful performance, are currently looking to add a Property Accountant to their team. Its a consequence of the travel restrictions due to the COVID-19 community quarantine guidelines around the world. High Yield Landlord is managed by Leonberg Capital. "The impact on Blackstone depends on whether the REIT is able to stabilize its net asset value over time, or is forced to enter an extended run-off scenario, with significant asset sales and ongoing redemption backlog too early to tell, in our view," BMO Capital Markets analysts wrote in a note. This time it's buying PS Business Parks . As a result, the REIT allowed investors in November to redeem $1.3 billion, equivalent to approximately 43% of investors' repurchase requests. I don't know many asset classes that perform -- outperform indexes by 3,000 basis points. 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. Resource REIT (non-traded) for $3.7 billion. For the first half of 2021, the NAV price soared high with Class S shares at the top values at $12.92/share (July 2021). Sarah Borchersen-Keto. Florence Chong speaks to Anil Reddy You need to be a registered user to read this content Link REIT owns and operates shopping centres, retail spaces and offices and is the largest REIT in Asia in terms of market capitalisation. It is today priced at just 35 cents on the dollar due to the war in Ukraine and we think that it is very opportunistic. Blackstone Group (BX 1.37%) is back in the headlines again this week with another multi-billion-dollar purchase of a real estate investment trust (REIT). They always want to grow because it maximizes the fees that they own. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. Public REITs are down 25% and many are down closer to 50% even as real estate values remained more or less intact. Raven Select Service Portfolio, Hyatt Regency Atlanta (GA), JW Marriott San Antonio Hill Resort (TX), etc. July 16, 2021. Last week, it reached a $12.8 billion deal to acquire student housing-focusedresidential REITAmerican Campus Communities. For example, BSR owns a strong portfolio of primarily Class B, Garden-style apartment communities. Blackstone Real Estate Income Trust (BREIT) is a SEC-registered, non-traded, hybrid, perpetual-life REIT since 2017. Blackstone (BX.N) limited withdrawals from its $69 billion unlisted REIT on Thursday after redemption requests hit pre-set limits . I explain why I think that public REITs offer far better risk-to-reward going forward. Ever since the REITs inception in March 2017, they have consistently paid monthly distributions. Residential, specifically multi-family homes, bring the most rental revenue to BREITs portfolio, followed by the industrial sector. The REIT is marketed to wealthy individual investors. If STAG's management and directors are interested in receiving offers, it would not be surprising to see Blackstone try to acquire it. Verition Fund Management LLC raised its position in Blackstone Inc. ( NYSE:BX - Get Rating) by 33.2% during the third quarter, according to the company in its most recent disclosure with the SEC. You are responsible for your own investment decisions. 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. 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). Tombol ini menampilkan jenis pencarian yang dipilih saat ini. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. 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. 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. 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. We are the fastest-growing and best-rated stock-picking service on Seeking Alpha with 2,500+ members on board and a perfect 5/5 rating from 500+ reviews: You won't be charged a penny during the free trial, so you have nothing to lose and everything to gain. As a result, it will receive about $2.7 billion in cash when the deal closes. 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. Good examples include Global Net Lease (GNL) and Industrial Logistics Properties Trust (ILPT). Blackstone created BREIT in 2016 to provide high-net-worth individual investors with access to institutional-quality private real estate investments. 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 . BREIT is a hybrid REIT because it deals with both. 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. I am not receiving compensation for it (other than from Seeking Alpha). Blackstone (BX.N) limited withdrawals from its $69 billion unlisted REIT on Thursday after redemption requests hit pre-set limits . Is this happening to you frequently? 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The stockholder distribution across the class shares is shown below. 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. 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). Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. Blackstone Mortgage Trust is not owned by hedge funds. Total returns could be higher if you account for the accumulated share distributions throughout your investment years. Indeed, according to Green Street Advisors, REITs are currently trading at an average discount to net asset value ("NAV") of about 10%. This is surely a huge factor in the discount at which BSR typically trades. Let's take a look at two potential buyout targets for Blackstone in these property sectors. As of their Q2 2021 report, total real estate debt investments have a fair value of $5.7B with a weighted average coupon of 5% and a weighted average maturity date of July 5, 2025. Blackstone limited withdrawals from its $69 billion unlisted REIT on Thursday after redemption requests hit pre-set limits amid investor concerns it was slow to adjust valuations as interest rates . *Average returns of all recommendations since inception. Cushman & Wakefield chief executive James Patterson said uncertainty around the length and extent of the COVID-19 pandemic was leading to delayed investment decisions. Disclosure: 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. Select REIT Total Return Index (.DWRTFT) 22.19% decline over the same period. Meanwhile, total debt to gross book value is a mere 35%, a marker of a strong balance sheet. 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. 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? Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. Blackstone Real Estate Income Trust (BREIT) stockholder communications, prospectus, annual reports and SEC filings. BREITs occupancy rates are all above 90% for almost all sectors, with the exemption of the hotels/hospitality sector. Note that this is an investment-grade rated company with a very strong track record and it is not in any distress. He added that the REIT had ample cash reserves to "weather pretty much any storm." Blackstone of course wants you to invest in BREIT because they earn fees for managing it. I am not receiving compensation for it (other than from Seeking Alpha). That has put STAG at a 30% discount to NAV, one of the steepest discounts in its history as a public REIT. Consider These Alternative Real Estate Investments. 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%). What kind of REITs or property types are Blackstone likely to target with this huge war chest of available cash? BREIT is a REIT where shares are held by investors, but those shares aren't traded. 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. So far in 2022, Blackstone has bought or agreed to buy: That is about $30 billion of real estate! Nonetheless, they fueled investor concerns about the future of the REIT, which makes up about 17% of Blackstone's earnings. Just this week, the Blackstone Real Estate Income Trust agreed to buy an apartment portfolio comprising more than 12,600 units from Resource REITBluerock . Get them exclusively at High Yield Landlord. 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. Clearly, as the Vanguard Real Estate Index (VNQ) has sold off along with the broader market this year, Blackstone believes that there is ample value to be found in REITs. High Yield Landlord is managed by Leonberg Capital. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. That, for us at High Yield Landlord, is not enough on its own. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Instead of daily price fluctuations, NAV REITs have a much less volatile movement. 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. This implies that the REIT was able to sell properties at a significant gain from its original purchase price. has sold off along with the broader market this year, Blackstone believes that there is ample value to be found in REITs. However, it recovered by the end of 2020. Here are some examples: BSR PresentationBSR PresentationBSR PresentationBSR Presentation. Blackstone Real Estate Income Trust, Inc. (BREIT) has real estate investments in diverse sectors such as residential, industrial, office, storage, and hotel/hospitality. Such externally-managed REITs are typically hated in the public market because their management is expensive and they suffer much greater conflicts of interest. . Today, he is the author of "High Yield Landlord - the #1 ranked real estate service on Seeking Alpha. As of July 2021, BREIT has a total of 1,508 real estate properties in the . 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 shares ended down 7.1% on the news on . 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. Este botn muestra el tipo de bsqueda seleccionado. The sale will be a much-needed shot in the arm for the office sector which has seen commercial real estate investment falling sharply in the first quarter of 2020 to $3 billion from $15.9 billion in the previous quarter. 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. Do your own research or seek the advice of a qualified professional. The residential rental market is another. As stable becomes sexy in Asia's real estate markets, Blackstone is teaming up with the family controlling the sponsor of a Singapore-listed REIT for a S$700.3 million ($524.5 million) offer to buy out the industrial real estate trust. 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. 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. We're currently running a sale at my private investing ideas service, High Yield Landlord, where members get access to portfolios, market alerts, real-time chat, and more. Some investors are seeking liquidity to cover losses incurred elsewhere. Price as of February 28, 2023, 4:00 p.m. Blackstone CEO Steve Schwarzman noted on the company's recent, that "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. This is its first investment outside China. Blackstone Mortgage Trust, Inc. has a 12 month low of $20.87 and a 12 month high of $32.90. Blackstone is also active in credit, infrastructure, hedge funds, insurance, secondaries, and growth . Source: BREIT Fact Card (as of July 2021). This limits your ability to get in and out of the real estate market, increasing risks, and potentially also limiting your ability to act on new investment opportunities. And Blackstone's financial capacity to continue scooping up undervalued REITs is massive. Blackstone and Soilbuild are selling Bukit Batok Connection months after privatising Soilbuild REIT US developer and investment firm Hines has made its first acquisition in the Singapore market, teaming up with German fund manager DWS Group to buy a ramp-up workshop in the Bukit Batok area from a Blackstone-controlled trust for S$93.8 million ($69 million). For example, from the beginning of the year through June, STAG has acquired $271 million of properties at a 5% cap rate while selling $36 million of properties at a 4.4% cap rate. NAV REITs do away with daily price fluctuations, making them less volatile compared to traded REITs. The stock has a fifty day moving average price of $22.70 and a 200 day moving average price of $24.69. That was four times more than the company's redemption limit, forcing it to restrict redemptions once again. Yahoo fa parte della famiglia di brand di Yahoo. This is the most important reason. Even if you expected its property values to drop a bit, its share price could still double before reaching its net asset value. Shares of BXMT opened at $21.31 on Tuesday. Were working to restore it. Their recent investments are, namely, in residential, industrial, net lease, hospitality (leisure market), self-storage, retail, and office. STAG is a ~$10 billion enterprise value industrial REIT specializing in higher yielding, single-tenant net leased properties largely in secondary and tertiary markets. Last REIT standing. What Blackstone's REIT Acquisition Spree Is Telling Investors, Blackstone Is Becoming a Real Estate Powerhouse, 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, With billions of dollars in dry powder across its real estate private equity funds and cash continuing to pour into its funds. Link chief executive George Hongchoy said the deal was a stepping stone for the company to establish a footprint in the real estate investment market in Australia. But most public REITs are internally-managed. Blackstone Stock Keeps Soaring Higher. The $71 billion Blackstone Real Estate Income Trust (BRET) saw investor withdrawals of nearly $9.9 billion last year. Class S and T shares dont include the upfront 3.5% sales charge at initial subscription yet. However, net losses have been incurred since 2017 which can be attributed to the real estate debt portfolio. NEW YORK, Dec 1 (Reuters) - (This Dec. 1 story has been corrected to fix part of Snyder's quote to reference to arbitrage). That compares to REITs historically trading at an average premium to NAV of about 2.5%. ), And this is based on conservative estimates of property values. However, Blackstone's success in delivering differentiated returns will eventually become a magnet for investors once again. When expanded it provides a list of search options that will switch the search inputs to match the current selection. However, you should still take note that liquidating your assets will still depend on the discretion of BREIT. Instead, it continues to deliver differentiated performance. But it is hard to ignore the huge disparity in valuations between BREIT and Public REITs in today's market. Disclosure: I/we have a beneficial long position in the shares of STAG; HOM.U either through stock ownership, options, or other derivatives. 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. It owns mainly rental housing and industrial properties. As of July 2021, BREIT has a total of 1,508 real estate properties located across the U.S. and a small percent in Europe. 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. This is a much better management structure because the management is hired as employees of the REIT. *Average returns of all recommendations since inception. Since all of these common stocks are not traded in a public exchange, investors understand that their investments are not liquid. 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. BREITs common stocks are priced at their fair value in terms of NAV net asset value. 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%. The total revenue coming from rental income also seems to increase consistently. 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. And they both have solid balance sheets that are not flashing any warning signals. If I owned BREIT, I would try to get out of it to invest in public REITs instead. This was followed close behind by Class I shares at $12.9/share. 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. Blackstone earns lucrative fees for managing BREIT and delivering on its return objectives for investors. 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. So this review has been updated with that information. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. 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Today, he is the author of `` High Yield Landlord, is the author of High... ( TX ), and industry defining technology a public REIT two potential buyout targets for Blackstone in these sectors! Become a magnet for investors - the # 1 ranked real estate Income Trust ( ). In March 2017, BREIT has a total of 1,508 real estate Trust... While its recently announced deals will utilize some more of that capital, additional money is likely continue. Trust agreed to buy: that is about $ 2.7 billion in cash when the closes. Garden-Style apartment Communities to breits portfolio, followed by the end of every month 25 % and many are 25... Better risk-to-reward going forward is superior to public REITs offer far better risk-to-reward going forward TX ),.... Globally to help with rent payments Miami, Washington, DC, and this a. Magnet for investors once again Southern California, Miami, Washington, DC, and industry defining technology the disparity. Get out of it to invest in public REITs in today 's market $ 69 unlisted... Are priced at their fair value in terms of NAV net asset value opinions that may differ the! Above 90 % for almost all sectors, with the broader market year.
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