Per maggiori informazioni sulle modalit di utilizzo dei dati, consulta la nostra Informativa sulla privacy e lInformativa sui cookie. HPA has a portfolio of over 17,000 homes throughout the U.S. This is a much better management structure because the management is hired as employees of the REIT. For a more comprehensive brief of BREITs real estate investment portfolio, refer to the table below. 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. For starters, its, 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. Price as of February 28, 2023, 4:00 p.m. 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. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. Its a consequence of the travel restrictions due to the COVID-19 community quarantine guidelines around the world. The company reports its financial statements and regular updates through SEC filings for public reference. High Yield Landlord is managed by Leonberg Capital. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. February 27, 2023 3:33 PM. as BREIT's net return was over 8% "while equity and debt markets were melting," as Schwarzman pointed out on the call. 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. As of July 2021, BREIT has a total of 1,508 real estate properties in the residential, industrial, net lease, self-storage, hotel/hospitality, retail, and office sectors located across the U.S. BREITs occupancy rates are all above 90% for almost all sectors, with the exemption of the hotels/hospitality sector which was heavily affected by the COVID-19 pandemic. . Please be aware of the risks associated with these stocks. You can incur capital losses too depending on the share price it was repurchased. 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. NAV REITs do away with daily price fluctuations, making them less volatile compared to traded REITs. 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). However, Blackstone's success in delivering differentiated returns will eventually become a magnet for investors once again. As a mortgage REIT, they have real estate debt investments through commercial and residential mortgage-backed securities. 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. It invests in real estate properties across 8 sectors and real estate debt through mortgage-backed securities and other real estate-related loans. 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 think that it is inferior and yet it is a lot more expensive. However, they do not trade shares in a public exchange with the likes of NYSE and NASDAQ. Bill Bayless, ACC co-founder and CEO, said the transaction marked the culmination of a "pioneering quest to transform the student housing . That left it with $36.3 billion of dry powder. We do not believe it is a good idea to buy a REIT simply because it looks like an attractive buyout prospect for big-money asset managers and private real estate funds. Our Standards: The Thomson Reuters Trust Principles. The Vanguard Group, Inc. is currently the company's largest shareholder with 9.3% of shares outstanding. This is the most important reason. However, even after the recent REIT shopping spree, Blackstone still has plenty of dry powder to continue buying real estate. It owns mainly rental housing and industrial properties. 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. It leads to "growth at all costs", which hurts returns, and this is why such externally-managed REITs are disliked by investors. BREIT has a diverse real estate property portfolio. By Milana Vinn. They have outperformed the MSCI U.S. REIT Index which generated only -7.6%. 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. 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. I think that the risk-to-reward of these discounted public REITs are far better. 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 Real Estate Income Trust (BREIT) is a SEC-registered, non-traded, hybrid, perpetual-life REIT since 2017. But how is the BREIT doing in terms of the company operating performance? Invest better with The Motley Fool. Select REIT Total Return Index (.DWRTFT) 22.19% decline over the same period. JOIN THE CONVERSATION. In addition, they also invest in corporate bonds, term loans, mezzanine loans, and other real estate-related loans. Total returns could be higher if you account for the accumulated share distributions throughout your investment years. They both have quality management teams with significant skin in the game. 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. "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. The Motley Fool has a disclosure policy. ", stunning outperformance continued last year. Indeed, according to Green Street Advisors, REITs are currently trading at an average discount to net asset value ("NAV") of about 10%. 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). Does the Stock Market Have You Down? Currently, BSR trades at a particularly stark discount. Clearly, the company will buy whatever it views as the most attractive viable deal. 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. 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. Click here to learn more!. You are responsible for your own investment decisions. As of July 2021, BREIT has a total of 1,508 real estate properties in the . They always want to grow because it maximizes the fees that they own. Become a Passive Landlord with our 8% Yielding Real Estate Portfolio. 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). 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. 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. 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 is to avoid market volatility especially with factors that do not directly relate to real estate. There is no upper limit on the size of this new fund, so it could potentially grow significantly larger. 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. Those sectors are benefiting from long-term tailwinds and inflation. 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. The company has a market cap of $3.67 billion, a P/E ratio of 14.90 and a beta of 1.31. Join us for a 2-week free trial and get access to all my highest conviction investment ideas. You can buy or sell with minimal fees with just a few clicks of mouse. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Click here to learn more!. New York, June 22, 2021 - Blackstone Real Estate Income Trust, Inc. ("BREIT") announced today that it has entered into a definitive agreement to acquire Home Partners of America ("HPA"), valuing the company at $6.0 billion. Notes: Class D shares dont include the upfront 1.5% sales charge at initial subscription yet. 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. Blackstone is also active in credit, infrastructure, hedge funds, insurance, secondaries, and growth . That has put STAG at a 30% discount to NAV, one of the steepest discounts in its history as a public REIT. 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. According to their 2020 annual report, they hold 1,370 real estate properties and 228 positions in real estate debt investments. 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. To make the world smarter, happier, and richer. 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. 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. We have over 500 five-star reviews from happy members who are already profiting from our real estate strategies. . I wrote this article myself, and it expresses my own opinions. It is impossible to predict with any certainty, because last year Blackstone acquired data center REIT QTS Realty, and in 2018 it acquired hospitality REIT LaSalle Hotel Properties. BREITs common stocks are priced at their fair value in terms of NAV net asset value. 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. 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. Blackstone told investors in a letter it would curb withdrawals from its REIT after it received redemption requests in November greater than 2% of its monthly net asset value and 5% of its quarterly net asset value. It is a lot cheaper and offers better upside potential going forward. 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. 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. ("Net asset value" is akin to an adjusted book value for REITs using estimated market values for their real estate. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. 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 . 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. 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. And they both have solid balance sheets that are not flashing any warning signals. You are responsible for your own investment decisions. Having invested in data centres in the US and Europe, Blackstone has eyes on Asia-Pacific - starting with India. 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. All quotes delayed a minimum of 15 minutes. 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. This is why they are today two of our largest holdings in our Core Portfolio. 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. NAV REITs work differently from traditional publicly-traded REITs. 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. Matthew DiLallo has positions in Blackstone and has the following options: short June 2023 $60 puts on Blackstone. Blackstone continues making major deals across the multifamily sector by planning to acquire Bluerock Residential Growth REIT in an all-cash . 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. In 2021, BREIT raised nearly $25 billion from investors. I have no business relationship with any company whose stock is mentioned in this article. SoCal Grocery Portfolio, Canarsie Plaza (NY), Bakers Center (PA), etc. Blackstone shares ended down 7.1% on the news on Thursday. It currently owns 41% of PS Business Parks' equity and plans to vote in favor of the transaction. Invest at least 75% of total assets in real estate or cash. Receive at least 75% of gross income from real estate, such as real property rents . Please try again later. Certain parameters from financial statements will tell you how the company managed its investments through the ups and downs of the business cycle. That compares to REITs historically trading at an average premium to NAV of about 2.5%. Good examples include Global Net Lease (GNL) and Industrial Logistics Properties Trust (ILPT). 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. , Blackstone will likely continue its real estate shopping spree. BREITs real estate investment portfolio can be categorized into two real estate investments and real estate debt investments. BREIT is a hybrid REIT because it deals with both. Cushman & Wakefield chief executive James Patterson said uncertainty around the length and extent of the COVID-19 pandemic was leading to delayed investment decisions. The deal values the, One interesting aspect of this deal is that it will provide an unexpected windfall to shareholders of. 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 . Dividends are paid and capital gains, if any, are shared. 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. 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. Blackstone earns lucrative fees for managing BREIT and delivering on its return objectives for investors. Este botn muestra el tipo de bsqueda seleccionado. 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. More investors are entrusting it with more of their capital, giving it the funds to acquire more real estate. ACC was the last public REIT dedicated to the sector to be taken private, following Campus Crest Communities' privatization by Harrison Street in 2015 and EdR by Greystar in 2018. Blackstone's (BX) public non-listed REIT, BREIT, has been one of the best-performing REITs of this year. This year, the company has set its sights particularly on acquisitions of real estate investment trusts ("REITs"). The majority of their real estate properties are in the residential (especially multifamily homes) and industrial sectors. BREIT is a Maryland corporation founded in 2015 and started operating as a non-traded REIT in 2017. The figure above shows the historical NAV price of the 4 types of class shares. Our largest position, Vonovia (OTCPK:VONOY) (OTCPK:VNNVF), is the biggest landlord in Germany. "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. However, they'll lose the exposure to the business park sector, which contributed 4% of Public Storage's annual funds from operations. This was followed close behind by Class I shares at $12.9/share. The chart below shows the YTD performance of all class share classes, plus the since inception date returns. Like the BPP funds, BREIT doesn't buy fixer-uppers. Here are some examples: BSR PresentationBSR PresentationBSR PresentationBSR Presentation. The REIT is marketed to wealthy individual investors. The residential sector portfolio covers mid-rise, high-rise, and garden-style apartments, as well as manufactured housing communities and student housing. 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. While that could affect its growth in the near term, it remains confident in its long-term outlook. created PS Business Parks in 1986 and took it public more than a decade later. Blackstone started seeing a flood of redemption requests late last year, exceeding its limit. 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. Proof in point: BREIT just had to limit withdrawals because too many investors are currently seeking to get out of it. Blackstone Inc. agreed to buy student-housing owner American Campus Communities Inc. in a deal valuing the company at about $12.8 billion, including debt, a bet that rents will continue to rise as . The company will likely continue to battle this headwind until it works through its current backlog. Nexus Select Trust has a portfolio of 17 operational shopping malls . 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. The residential rental market is another. Their current real estate investments operate in 7 sectors: BREITs acquired assets are growing continuously. Both share classes can be bought through fee-based programs, registered investment advisors, institutional and fiduciary accounts. However, he said there were no signs of panic selling as a result of vendor distress "which is encouraging". *Average returns of all recommendations since inception. 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. Some investors are seeking liquidity to cover losses incurred elsewhere. 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. Cost basis and return based on previous market day close. Blackstone of course wants you to invest in BREIT because they earn fees for managing it. This covers BREITs direct property investments, equity in public and private real estate-related companies, and unconsolidated investments. So this review has been updated with that information. Please disable your ad-blocker and refresh. ) Blackstone Mortgage Trust is not owned by hedge funds. While a cheaper fair value is good news for new investors. 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 gives a hint as to why Blackstone has been hoovering up REITs like a vacuum this year. Join us for a 2-week free trial and get access to all my highest conviction investment ideas. Is It a Buy Right Now? Even if Blackstone does not acquire BSR or STAG, we think both REITs will perform well in the future. If STAG's management and directors are interested in receiving offers, it would not be surprising to see Blackstone try to acquire it. Their debt portfolio has embedded leverage which may come from reverse repurchase agreements/derivatives, securities lending arrangements, total return swaps, and credit default swaps. In the . 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. BREIT also has real estate debt investments through securities and loans backed by the U.S. market. I have no business relationship with any company whose stock is mentioned in this article. Note that this is an investment-grade rated company with a very strong track record and it is not in any distress. And management is also skilled and motivated, as insiders own around 40% of the company. This button displays the currently selected search type. BREIT, the non-traded real . 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. 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. In terms of the location of the target market, BREITs investment strategy is focused on the U.S. market.