Nexus Select Trust has a portfolio of 17 operational shopping malls . 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 2021, BREIT raised nearly $25 billion from investors. 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. Is this happening to you frequently? But most public REITs are internally-managed. As a mortgage REIT, they have real estate debt investments through commercial and residential mortgage-backed securities. Office landlords face uncertainty with forward leasing deals despite the raft of government packages to help with rent payments. STAG is a ~$10 billion enterprise value industrial REIT specializing in higher yielding, single-tenant net leased properties largely in secondary and tertiary markets. Despite the pandemic, they acquired worth $10.5B of real estate properties in the multifamily, industrial, and net lease sectors in 2020. Blackstone Inc on Monday agreed to buy real estate investment trust (REIT) PS Business Parks for $7.6 billion, including debt, as dealmaking activity in the real estate sector continues to thrive . Blackstone Inc. is an American alternative investment management company based in New York City.Blackstone's private equity business has been one of the largest investors in leveraged buyouts in the last three decades, while its real estate business has actively acquired commercial real estate. This time it's buying PS Business Parks . Matthew DiLallo has positions in Blackstone and has the following options: short June 2023 $60 puts on Blackstone. I have no business relationship with any company whose stock is mentioned in this article. 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. Though Blackstone sometimes acquires individual real estate properties, such as The Bellagio in Las Vegas, it more often seeks opportunities to scoop up whole portfolios that will move the needle. 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). This is to avoid market volatility especially with factors that do not directly relate to real estate. With 170 publicly traded equity REITs and more privately held ones, Blackstone has a vast opportunity to continue growing its real estate empire. 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. They claim that, unlike public REITs, BREIT is uncorrelated with the public stock market because it is a non-listed real estate investment vehicle. Click here to learn more!. 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. Usually, these distributions are credited 20 days after the end of every month. 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. Public Storage expects to recognize a $2.3 billion after-tax gain, which it intends to distribute to its shareholders. "Our business is built on performance, not fund flows, and performance is rock solid," the spokesperson said. The company will likely continue to battle this headwind until it works through its current backlog. As such, many REITs are now priced at large discounts relative to the underlying value of the real estate they own. And management is also skilled and motivated, as insiders own around 40% of the company. Cap rates have expanded a bit, but so has the property NOI in most cases. Learn More. The majority of their real estate properties are in the residential (especially multifamily homes) and industrial sectors. If you want full access to our Portfolio and all our current Top Picks, feel free to join us for a 2-week free trial at High Yield Investor. Aside from contributing to the overall returns, real estate debt investments also provide added liquidity especially for cash management in the Companys share repurchase plans. 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. 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. 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 . 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. 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. The unconsolidated investments come from their joint venture with MGM Growth Properties LLC, wherein BREIT owns 49.9% of interest. And apparently this is the new target. 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. So this review has been updated with that information. While its recently announced deals will utilize some more of that capital, additional money is likely to continue flowing into its coffers. Blackstone Group has been on an aggressive REIT buying spree in the last few years. 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. Write by: *Average returns of all recommendations since inception. Were working to restore it. Invest better with The Motley Fool. 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. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. 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 . Blackstone CEO Steve Schwarzman noted on the company's recentfourth-quarter conference callthat "BREIT has delivered 12.5% net returns annually since inception six years ago for its largest share class, earning over three times the public REIT index.". Source: BREIT Fact Card (as of July 2021). Blackstone has outperformed the market over the past 15 years by 5.0% annually. Source: BREIT Prospectus (as of June 30, 2021). There are literally no signs of a slowdown yet for STAG's industrial real estate, and yet the market has punished STAG with a ~35% selloff this year. The firm owned 20,221 shares of the asset manager's stock after acquiring an additional 5,035 shares during the quarter. Having invested in data centres in the US and Europe, Blackstone has eyes on Asia-Pacific - starting with India. Just a month after, it grew to 1,508 properties. Were sorry, this feature is currently unavailable. 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. Blackstone is also active in credit, infrastructure, hedge funds, insurance, secondaries, and growth . With dividends reinvested, the benchmark SPDR S&P 500 ETF (ticker: SPY) lost 18.2% last . Blackstone claims that its REIT is superior to others. Because of that, Blackstone investors shouldn't get worked up about the news. I have no business relationship with any company whose stock is mentioned in this article. As of March 17, 2021, it has a total of 112,104 stockholders. 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. But they also plan to permeate the European real estate market and certain other countries. Those sectors are benefiting from long-term tailwinds and inflation. 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. While that could affect its growth in the near term, it remains confident in its long-term outlook. That left it with $36.3 billion of dry powder. These cash reserves totaled $2.7 billion as of the end of October, according to its prospectus. 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. For example, Blackstone provides the option to repurchase shares from investors once a month. Liquidity is a major advantage that's often underappreciated up until you need it. Let's take a look at two potential buyout targets for Blackstone in these property sectors. This button displays the currently selected search type. Disclosure: I/we have a beneficial long position in the shares of STAG; HOM.U either through stock ownership, options, or other derivatives. 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. 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. Credit Suisse analysts wrote in a note that they expected the REIT's woes to weigh on Blackstone's fee-related earnings and assets under management. ", stunning outperformance continued last year. The transaction has been unanimously approved by the REIT's Board of Directors and represents a premium of 63 percent to the REIT's most recently published Net Asset Value of $9.06 per share . BREIT is an externally-managed REIT. Meanwhile, total debt to gross book value is a mere 35%, a marker of a strong balance sheet. The U.S. real estate investment trust, or REIT, sector was hit abnormally hard during the 2022 bear market. Blackstone Mortgage Trust is not owned by hedge funds. A disadvantage of non-traded REITs is the higher management fees as compared to traded REITs. 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. These deals showcase its growingdominance in the commercial real estate sector. "People are taking profits at the value Blackstone says their REIT shares are at," said Snyder. BREITs common stocks are priced at their fair value in terms of NAV net asset value. To give you an example, at High Yield Landlord, we hold an international Portfolio with REITs from 6 different countries. However, net losses have been incurred since 2017 which can be attributed to the real estate debt portfolio. Clearly, that is Blackstone's view. This is the most important reason. Many investors in the REIT are concerned that Blackstone has been slow to adjust the vehicle's valuation to that of publicly traded REITs that have taken a hit amid rising interest rates, a source close to the fund said. Natalie Wong. Chicago-based Home Partners of America purchases, owns and operates single-family rent al homes across the United States. 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). In many cases, the discount is 20, 30, 40, or even 50% in extreme cases. (the "Adviser"). Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. The REIT's quarterly dividend of ~$0.13 (paid monthly in $0.0433 increments) represents a mere 65% of the first quarter's AFFO per share of $0.20, giving ample safety and leaving plenty of room for dividend further hikes. Blackstone shares ended down 7.1% on the news on . Blackstone Stock Keeps Soaring Higher. Blackstone Mortgage Trust, Inc. has a 12 month low of $20.87 and a 12 month high of $32.90. Last week, it reached a $12.8 billion deal to acquire student housing-focusedresidential REITAmerican Campus Communities. 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. Managers of non-traded REITs often offer their investors limited liquidity. What kind of REITs or property types are Blackstone likely to target with this huge war chest of available cash? The chart below shows the YTD performance of all class share classes, plus the since inception date returns. High Yield Landlord is managed by Leonberg Capital. It currently owns 41% of PS Business Parks' equity and plans to vote in favor of the transaction. Shares of BXMT opened at $21.31 on Tuesday. Barclays analysts downgraded their rating of Blackstone's stock to "equal weight" from "overweight" and cut their price target to $90 from $98 on Friday. Herbert Smith Freehills, JLL and Cushman & Wakefield advised on the sale. By. Rising interest rates weigh on real estate values because they make financing properties more expensive. July 16, 2021. Those sectors are benefiting from long-term tailwinds and inflation. BREIT offers a 4.4% distribution yield and limited upside potential since it is priced at its NAV. 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. Tombol ini menampilkan jenis pencarian yang dipilih saat ini. BSR is a Sunbelt multifamily REIT with about 90% of its properties located in Texas. Total returns could be higher if you account for the accumulated share distributions throughout your investment years. Making the world smarter, happier, and richer. Blackstone managed a total of $236 billion of wealth held by individuals as of the end of September, up 43% year-on-year. If you have an ad-blocker enabled you may be blocked from proceeding. (Reuters) - Cvent Holding Corp, a U.S. software provider that facilitates in-person and virtual meetings, has rejected a $3.9 billion acquisition offer from buyout firm Blackstone . Although Santarelli kept his price target for Gaming & Leisure Properties Inc. at $60 per share, he bumped his . As of FY 2020, each common stock class received a gross distribution of $0.6354 per share. TORONTO - Blackstone Real Estate Income Trust Inc. has signed a deal to buy WPT Industrial Real Estate Investment Trust in an all-cash deal valued at US$3.1 billion . ET, 3 Dividend Stocks to Buy Before the Bear Market Ends. "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. Today, he is the author of "High Yield Landlord - the #1 ranked real estate service on Seeking Alpha. Blackstone Makes $524.5M Buyout Offer for Singapore's Soilbuild REIT. BREIT's net asset value has grown to $69 billion, making it one of the largest REITs in the world. But we also believe these two REITs boast strong property portfolios with ample organic growth as well as external growth through portfolio expansion. That's one of several long-term growth drivers. Cost basis and return based on previous market day close. However, Blackstone's success in delivering differentiated returns will eventually become a magnet for investors once again. The company has a market cap of $3.67 billion, a P/E ratio of 14.90 and a beta of 1.31. Blackstone will often claim that BREIT is superior to public REITs because it supposedly provides better diversification benefits. The REIT is marketed to wealthy individual investors. 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. 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. I am not receiving compensation for it (other than from Seeking Alpha). 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. You are responsible for your own investment decisions. Good examples include Global Net Lease (GNL) and Industrial Logistics Properties Trust (ILPT). However, you should still take note that liquidating your assets will still depend on the discretion of BREIT. 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. Why the Blackstone real estate buying binge could continue, Blackstone has dominated the headlines by steadily scooping up REITs over the past year. EdR Student Housing Portfolio (10,610 units), Southeast MH portfolio (8,563 units), Acorn Multifamily Portfolio (8,309 units), etc. 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. Bellagio (NV), MGM Grand (NV), & Mandalay Bay (NV). Become a Passive Landlord with our 8% Yielding Real Estate Portfolio. In the . Schwarzman took home more than $1.27 . As a result, it will receive about $2.7 billion in cash when the deal closes. Blackstone of course wants you to invest in BREIT because they earn fees for managing it. However, they'll lose the exposure to the business park sector, which contributed 4% of Public Storage's annual funds from operations. Therefore, I continue to accumulate real estate through the public market. With the help of BX REIT Advisors LLC, their investment strategy is to invest in stabilized and diverse real estate portfolios to provide income to their investors. Este botn muestra el tipo de bsqueda seleccionado. *Average returns of all recommendations since inception. . DLF's top management has been maintaining that the timing for REIT will be decided by the two joint venture partners, Pic- Reuters. The $71 billion Blackstone Real Estate Income Trust (BRET) saw investor withdrawals of nearly $9.9 billion last year. 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. 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