In contrast to the publicly listed Dow Jones U.S. Select REIT Total Return Index’s 22.19% decrease during the same time period, Blackstone claimed a 9.3% year-to-date return for its REIT, net of expenses.
Following a spike in redemption requests, Blackstone Inc. on Thursday restricted withdrawals from its $69 billion unlisted real estate income trust (REIT), dealing a brand that helped it grow into an asset management powerhouse an unparalleled blow.
Instead of Blackstone deciding on the day’s restrictions, the curbs were imposed because redemptions exceeded pre-established limits. However, they increased investor apprehensions regarding the REIT’s future, which accounts for around 17% of Blackstone’s profits. On the news, Blackstone’s stock ended the day down 7.1%.
According to a source close to the fund, many REIT investors are unhappy that Blackstone has been slow to raise the vehicle’s valuation to that of publicly traded REITs that have suffered due to higher interest rates. Because they make financing properties more expensive, rising interest rates have a negative impact on real estate values.
In contrast to the publicly listed Dow Jones U.S. Select REIT Total Return Index’s 22.19% decrease during the same time period, Blackstone claimed a 9.3% year-to-date return for its REIT, net of expenses.
In response to redemption requests in November that exceeded 2% of its monthly net asset value and 5% of its quarterly net asset value, Blackstone wrote to investors informing them that it would limit withdrawals from its REIT. As a result, the REIT permitted investors to redeem $1.3 billion in November, or around 43% of their repurchase requests.
