It is a lot cheaper and offers better upside potential going forward. 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). Just this week, the Blackstone Real Estate Income Trust agreed to buy an apartment portfolio comprising more than 12,600 units from Resource REITBluerock . Currently, BREITs presence dominates in the NAV REIT market. The distribution of these capital shares is specified below. DISCLAIMER: Jussi Askola is not a Registered Investment Advisor or Financial Planner. 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.". Puoi cambiare le tue preferenze in qualunque momento nella sezione Le tue impostazioni per la privacy. That's one of several long-term growth drivers. To make the world smarter, happier, and richer. Jussi Askola is a former private equity real estate investor with experience working for a +$250 million investment firm in Dallas, Texas; and performing property acquisition in Germany. Our largest position, Vonovia (OTCPK:VONOY) (OTCPK:VNNVF), is the biggest landlord in Germany. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Blackstone Real Estate Income Trust, Inc. (BREIT) has real estate investments in diverse sectors such as residential, industrial, office, storage, and hotel/hospitality. I am not receiving compensation for it (other than from Seeking Alpha). Is this happening to you frequently? 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 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. I/we have a beneficial long position in the shares of STAG; HOM.U either through stock ownership, options, or other derivatives. 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. STAG is a ~$10 billion enterprise value industrial REIT specializing in higher yielding, single-tenant net leased properties largely in secondary and tertiary markets. He has authored award-winning academic papers on REIT investing, been featured on numerous financial media outlets, has over 50,000 followers on SeekingAlpha, and built relationships with many top REIT executives. Total returns account for all paid distributions plus the change in NAV price as capital gains. 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%. Florence Chong speaks to Anil Reddy You need to be a registered user to read this content Ascendas Hospitality and Hong Kong-based Gaw Capital declined to comment. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. It had only deployed about $47.2 billion by the end of the first quarter. 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 . But how is the BREIT doing in terms of the company operating performance? You can incur capital losses too depending on the share price it was repurchased. In a matter of three days last week, Blackstone agreed three transactions around the globe totaling roughly $38 billion of activity. Blackstone Stock Keeps Soaring Higher. Managing more than $975 billion, the company invests money for wealthy . The asset manager is buying so aggressively because REIT valuations are significantly below the private market valuations of their real estate. Select REIT Total Return Index 22.19% decline over the same period. Those sectors are benefiting from long-term tailwinds and inflation. 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. 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. Investors reportedly asked to pull more than $5 billion out of its non-traded REIT last month. 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. Each type of share has a par value of $0.01. 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 Invest at least 75% of total assets in real estate or cash. The total revenue coming from rental income also seems to increase consistently. 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. 2021 YTD returns were the highest because BREIT has recovered well from the effects of the COVID-19 pandemic. BREIT is a SEC-registered REIT since 2017. However, it recovered by the end of 2020 and soared in the first half of 2021. Blackstone continues making major deals across the multifamily sector by planning to acquire Bluerock Residential Growth REIT in an all-cash . 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. BREIT is an externally-managed REIT. 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. BREIT is a REIT where shares are held by investors, but those shares aren't traded. 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. 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 Motley Fool has a disclosure policy. The stock has a fifty day moving average price of $22.70 and a 200 day moving average price of $24.69. With dividends reinvested, the benchmark SPDR S&P 500 ETF (ticker: SPY) lost 18.2% last . Like the BPP funds, BREIT doesn't buy fixer-uppers. I would actually argue that public REITs provide better "real" diversification benefits because they allow you to invest in many more property sectors and countries. But most public REITs are internally-managed. Natalie Wong. Asset management giant Blackstone (BX) boasts a portfolio of assets under management reaching nearly $1 trillion, made up largely of real estate. February 27, 2023 new bill passed in nj for inmates 2022 No Comments . Their corporate headquarters is located at 345 Park Avenue, New York. Today, he is the author of "High Yield Landlord - the #1 ranked real estate service on Seeking Alpha. According to their 2020 annual report, they hold 1,370 real estate properties and 228 positions in real estate debt investments. Click here to learn more!. Having invested in data centres in the US and Europe, Blackstone has eyes on Asia-Pacific - starting with India. Blackstone's purchase of American Campus makes student housing a fully privately held asset class in the US. Cost basis and return based on previous market day close. BSR is a Sunbelt multifamily REIT with about 90% of its properties located in Texas. Become a Passive Landlord with our 8% Yielding Real Estate Portfolio. Investors always going with the big names to their detriment. 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. As a result, the REIT allowed investors in November to redeem $1.3 billion, equivalent to approximately 43% of investors' repurchase requests. It has a strong balance sheet with mostly fixed-rate debt. 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. To be fair, BREIT is a pretty vehicle and it has a strong track record. The U.S. real estate investment trust, or REIT, sector was hit abnormally hard during the 2022 bear market. The majority of investors redeeming were from Asia and needed the liquidity, they said. High Yield Landlord is managed by Leonberg Capital. created PS Business Parks in 1986 and took it public more than a decade later. Although Santarelli kept his price target for Gaming & Leisure Properties Inc. at $60 per share, he bumped his . Este botn muestra el tipo de bsqueda seleccionado. Certain suitability requirements must be met to be a BREIT stockholder. NAV REITs work differently from traditional publicly-traded REITs. 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. Last week, it reached a $12.8 billion deal to acquire student housing-focused, . Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. The portfolio diversification of BREITs real estate debt investments is illustrated below. 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. 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. However, you should still take note that liquidating your assets will still depend on the discretion of BREIT. 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. As an equity REIT, they have a diverse coverage of real estate investments. BREITs occupancy rates are all above 90% for almost all sectors, with the exemption of the hotels/hospitality sector. High Yield Landlord is managed by Leonberg Capital. 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. But the better way to gauge a REITs performance is through its FFO. Simply Self Storage, East Coast Storage Portfolio, Cactus Storage Portfolio, etc. The spokesperson added that the REIT relied on a long-term fixed rate debt structure, making it resilient. So far in 2022, Blackstone has bought or agreed to buy: Preferred Apartment . Invest better with The Motley Fool. Today, he is the author of "High Yield Landlord - the #1 ranked real estate service on Seeking Alpha. All quotes delayed a minimum of 15 minutes. Blackstone is also active in credit, infrastructure, hedge funds, insurance, secondaries, and growth . Cuando se ampla, se proporciona una lista de opciones de bsqueda para que los resultados coincidan con la seleccin actual. 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). This means you can buy real estate at 50 cents on the dollar through the public market. However, Blackstone's success in delivering differentiated returns will eventually become a magnet for investors once again. So this review has been updated with that information. 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.. See here for a complete list of exchanges and delays. For a more comprehensive brief of BREITs real estate investment portfolio, refer to the table below. With 8.1% and 4.3% of the shares outstanding respectively, BlackRock, Inc. and Blackstone Inc. are the second and third largest shareholders. That left it with $36.3 billion of dry powder. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. 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. Blackstone shares ended down 7.1% on the news on Thursday. 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%. 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. Blackstone claims that its REIT is superior to others. 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. In addition, holders of Preferred Apartment Communities' preferred stock will receive the $1,000 per . The price history tells you how the company is valued at face value. It was bought on a sharp yield of close to 4 per cent. 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. 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%). February 27, 2023 3:33 PM. 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 . Despite the pandemic, they acquired worth $10.5B of real estate properties in the multifamily, industrial, and net lease sectors in 2020. Do your own research or seek the advice of a qualified professional. This is a big draw for investor interest in REITs. When expanded it provides a list of search options that will switch the search inputs to match the current selection. And apparently this is the new target. 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 . Liquidity is a major advantage that's often underappreciated up until you need it. 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. Blackstone Makes $524.5M Buyout Offer for Singapore's Soilbuild REIT. Blackstone President Jon Gray received $479.2 million as income in 2022. 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). "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. Yahoo fa parte della famiglia di brand di Yahoo. This year, the company has set its sights particularly on acquisitions of real estate investment trusts ("REITs"). 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. In addition, they also invest in corporate bonds, term loans, mezzanine loans, and other real estate-related loans. Blackstone REIT agreed to buy all of the outstanding shares of Preferred Apartment Communities for $25.00 each, and once the transaction closes, the REIT's common stock will no longer be listed on the New York Stock Exchange. BREIT had been a big growth driver for Blackstone. Per maggiori informazioni sulle modalit di utilizzo dei dati, consulta la nostra Informativa sulla privacy e lInformativa sui cookie. The deal values the, One interesting aspect of this deal is that it will provide an unexpected windfall to shareholders of. Tombol ini menampilkan jenis pencarian yang dipilih saat ini. Associate Director at Atlantic Group. The Blackstone Group again advanced its push into the multifamily market with a sizable acquisition spanning in-demand Sun Belt sectors. This time it's buyingPS Business Parks(PSB) for $7.6 billion. Blackstone Mortgage Trust is not owned by hedge funds. They earn income by leasing out rental spaces to clients. I wrote this article myself, and it expresses my own opinions. Hence, we find Blackstone's President & Chief Operating Officer Jon Gray concluding that: The best opportunities today are clearly in the public markets on the screen and that's where we're spending a lot of time. 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. What's more, the portfolio is performing quite well organically as well. Looking for more investing ideas like this one? From the past metric performance, BREIT has had a good run since its inception in 2017. The trust's managers said last month they were reviewing options after receiving an unsolicited expression of interest to buy out all its stapled securities. 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. 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. 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. Indeed, according to Green Street Advisors, REITs are currently trading at an average discount to net asset value ("NAV") of about 10%. This means that there is an external asset manager, in this case, Blackstone, that takes care of the management in exchange for fees. Clicca su Gestisci impostazioni per maggiori informazioni e per gestire le tue scelte. 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. The asset manager partners with big money players like pension funds and insurance companies to provide strong returns and steady income. The national CBD office market vacancy rate increased by 0.1 percentage point from 8.3 per cent to 8.4 per cent in three months ending March 31. It invests in real estate properties across 8 sectors and real estate debt through mortgage-backed securities and other real estate-related loans. 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. The majority of their real estate properties are in the residential (especially multifamily homes) and industrial sectors. -. ", stunning outperformance continued last year. This was followed close behind by Class I shares at $12.9/share. Let's take a look at two potential buyout targets for Blackstone in these property sectors. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. I am not receiving compensation for it (other than from Seeking Alpha). Even if you expected its property values to drop a bit, its share price could still double before reaching its net asset value. Bill Bayless, ACC co-founder and CEO, said the transaction marked the culmination of a "pioneering quest to transform the student housing . Jussi Askola is a former private equity real estate investor with experience working for a +$250 million investment firm in Dallas, Texas; and performing property acquisition in Germany. However, it recovered by the end of 2020. I have no business relationship with any company whose stock is mentioned in this article. It only fulfilled about a quarter of those redemptions because it hit its 2% monthly limit. Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Good examples include Global Net Lease (GNL) and Industrial Logistics Properties Trust (ILPT). 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. If you have an ad-blocker enabled you may be blocked from proceeding. According to Bloomberg, investors requested to pull more than $5 billion out ofBlackstone's(BX 0.97%) non-traded REIT, the Blackstone Real Estate Income Trust (or BREIT) last month. Their strongest market comes from the West and Southern states. Many non-traded REITs suspended their repurchase programs during the early days of the pandemic. They both have quality management teams with significant skin in the game. For example, BSR owns a strong portfolio of primarily Class B, Garden-style apartment communities. The Motley Fool has a disclosure policy. Just because something isn't quoted does not mean that it isn't correlated or volatile. Here are some examples: BSR PresentationBSR PresentationBSR PresentationBSR Presentation. Even if Blackstone does not acquire BSR or STAG, we think both REITs will perform well in the future. 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. 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. *Average returns of all recommendations since inception. Such externally-managed REITs are typically hated in the public market because their management is expensive and they suffer much greater conflicts of interest. That suggests it could make more headline-grabbing deals this year. It leads to "growth at all costs", which hurts returns, and this is why such externally-managed REITs are disliked by investors. So far, its highest total net distribution (includes deductions of corresponding fees already) was Class I shares in FY 2019. They have outperformed the MSCI U.S. REIT Index which generated only -7.6%. 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 . This is the most important reason. 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. More investors are entrusting it with more of their capital, giving it the funds to acquire more real estate. Rising interest rates weigh on real estate values because they make financing properties more expensive. JOIN THE CONVERSATION. The 28,385 square metre building is 10-storeys and was redeveloped in 2010-11 as part of the Westfield Sydney redevelopment. Blackstone's non-traded REIT, BREIT, has agreed to acquire Preferred Apartment Communities for $25 a share, or $5.8 billion. Overall, investors have handed Blackstone $83.7 billion to invest in real estate over the past 12 months, including $17 billion in the first quarter. The information in his articles and his comments on SeekingAlpha.com or elsewhere is provided for information purposes only. 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. 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. Published - Tuesday, 20 Dec, 2022. I think that it is inferior and yet it is a lot more expensive. 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 has reported a 9.3% year-to-date return for its REIT, net of fees, a contrast to the publicly traded Dow Jones U.S. BREIT has delivered differentiated returns for its investors since its formation. Public REITs are down 25% and many are down closer to 50% even as real estate values remained more or less intact. Is now still a better time to invest in BREIT, or should you rather consider public REITs? 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. Raven Select Service Portfolio, Hyatt Regency Atlanta (GA), JW Marriott San Antonio Hill Resort (TX), etc. But it is hard to ignore the huge disparity in valuations between BREIT and Public REITs in today's market. EmeryTech Office (CA) & Coleman Highline Office. BREIT has 4 types of common shares which differ in how the investors will be charged. 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. 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. 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. By Milana Vinn. The company has a market cap of $3.67 billion, a P/E ratio of 14.90 and a beta of 1.31. If you can't get your money back, does the "paper valuation" then have any meaning? Consider These Alternative Real Estate Investments. BREITs common stocks are priced at their fair value in terms of NAV net asset value. "People are taking profits at the value Blackstone says their REIT shares are at," said Snyder. BREIT issues consistent monthly distributions since its inception. Even Blackstone's COO indirectly told us in the Q2 conference call that public REITs are a lot more opportunistic today: "The best opportunities today are clearly in the public markets on the screen and that's where we're spending a lot of time.". "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 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. HPA has a portfolio of over 17,000 homes throughout the U.S. As a result, it will receive about $2.7 billion in cash when the deal closes. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. 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.
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