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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. Blackstone Real Estate Income Trust, Inc. (B REIT) has agreed to acquire Home Partners of America (HPA) for $6 billion. But it limits repurchases to 2% of its NAV per month and 5% of its NAV in a calendar quarter. Despite the pandemic, they acquired worth $10.5B of real estate properties in the multifamily, industrial, and net lease sectors in 2020. Invest better with The Motley Fool. In the . 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. Blackstone Real Estate Income Trust, Inc. (BREIT) has real estate investments in diverse sectors such as residential, industrial, office, storage, and hotel/hospitality. For a Limited-Time - You can join Seeking Alphas #1 community of real estate investors at the Lowest-Rate-Ever-Offered. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Making the world smarter, happier, and richer. 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. Do your own research or seek the advice of a qualified professional. Invest better with The Motley Fool. According to their 2020 annual report, they hold 1,370 real estate properties and 228 positions in real estate debt investments. When expanded it provides a list of search options that will switch the search inputs to match the current selection. This was followed close behind by Class I shares at $12.9/share. 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. Select REIT Total Return Index (.DWRTFT) 22.19% decline over the same period. Were working to restore it. But the better way to gauge a REITs performance is through its FFO. 22/06/2021. But I think that public REITs are today far more opportunistic than BREIT. 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. They and other analysts said Blackstone's REIT runs the risk of getting caught in a spiral of selling assets to meet redemptions if it cannot regain the trust of its investors. Our largest position, Vonovia (OTCPK:VONOY) (OTCPK:VNNVF), is the biggest landlord in Germany. 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. 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. 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 . 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. They've been around for over 26 years and . To liquidate their assets, BREIT must repurchase their shares, which is not guaranteed. Source: BREIT Fact Card (as of July 2021). The asset manager partners with big money players like pension funds and insurance companies to provide strong returns and steady income. BREIT issues consistent monthly distributions since its inception. If I owned BREIT, I would try to get out of it to invest in public REITs instead. By. Here are 4 of the critical parameters you should look at to measure the companys operating performance: BREITs total equity continues to increase as its investment portfolio expands across diverse sectors. Clearly, that is Blackstone's view. Westfield tower at 100 Market Street, SydneyCredit:Peter Rae. Blackstone Mortgage Trust, Inc. has a 12 month low of $20.87 and a 12 month high of $32.90. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Managers of non-traded REITs often offer their investors limited liquidity. Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. 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 . Multifamily REIT Preferred Apartment Communities announced . 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). HPA's unique, resident-led business model expands housing access and choice, while providing a clear path to . 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. In fact, Blackstone is close to finalizing what could be the biggest traditional private-equity real estate investment fund in history, according to the Wall Street Journal. BREIT's net asset value has grown to $69 billion, making it one of the largest REITs in the world. Currently, Blackstone has a market capitalization of $66.78 billion. You are responsible for your own investment decisions. 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. 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. 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. Try it Free for 2-Weeks. . And Blackstone's financial capacity to continue scooping up undervalued REITs is massive. 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 The Motley Fool has a disclosure policy. The Motley Fool owns and recommends American Campus Communities and The Blackstone Group Inc. 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.. I think that the risk-to-reward of these discounted public REITs are far better. Each type of share has a par value of $0.01. 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. The company will likely continue to battle this headwind until it works through its current backlog. Ultimately, private REITs pool investors' capital and purchase various properties based on the fund's mandate. I think that it is inferior and yet it is a lot more expensive. Public Storage expects to recognize a $2.3 billion after-tax gain, which it intends to distribute to its shareholders. While commercial real estate itself is performing extraordinarily well this year and retaining its value, publicly traded REITs have shed around 20% of their value and now mostly trade at discounts to NAV. This is a much better management structure because the management is hired as employees of the REIT. Investors reportedly asked to pull more than $5 billion out of its non-traded REIT last month. Blackstone started seeing a flood of redemption requests late last year, exceeding its limit. 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. Public Storage expects to recognize a $2.3 billion after-tax gain, which it intends to distribute to its shareholders. Liz Brumer-Smith (Blackstone): Blackstone is one of the leading alternative asset-management companies in the world. 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. PS Business Parks owns a 27 million square foot portfolio of industrial, business park, traditional office, and multifamily properties located primarily in California, Miami, Texas, and . Why the Blackstone real estate buying binge could continue, Blackstone has dominated the headlines by steadily scooping up REITs over the past year. Instead of daily price fluctuations, NAV REITs have a much less volatile movement. 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%. Select REIT Total Return Index 22.19% decline over the same period. It had only deployed about $47.2 billion by the end of the first quarter. However, it recovered by the end of 2020 and soared in the first half of 2021. 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. Nexus Select Trust has a portfolio of 17 operational shopping malls . Mortgage 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). 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. 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. DISCLAIMER: Jussi Askola is not a Registered Investment Advisor or Financial Planner. Is It a Buy Right Now? Simply Self Storage, East Coast Storage Portfolio, Cactus Storage Portfolio, etc. Blackstone has outperformed the market over the past 15 years by 5.0% annually. Please try again later. The 28,385 square metre building is 10-storeys and was redeveloped in 2010-11 as part of the Westfield Sydney redevelopment. The real estate group of Blackstone, Blackstone Real Estate, is our sponsor and an affiliate of BX REIT Advisors L.L.C. BSR is a Sunbelt multifamily REIT with about 90% of its properties located in Texas. 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. It leads to "growth at all costs", which hurts returns, and this is why such externally-managed REITs are disliked by investors. As of FY 2020, each common stock class received a gross distribution of $0.6354 per share. Natalie Wong. 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 . 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 . They always want to grow because it maximizes the fees that they own. But it is hard to ignore the huge disparity in valuations between BREIT and Public REITs in today's market. 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. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. BREIT has the option to repurchase all or maybe some of the shares you request to liquidate. 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. The curbs came because redemptions hit pre-set limits, rather than Blackstone setting the limits on the day. Shares of BXMT opened at $21.31 on Tuesday. February 27, 2023 new bill passed in nj for inmates 2022 No Comments . Is now still a better time to invest in BREIT, or should you rather consider public REITs? The residential rental market is another. One interesting aspect of this deal is that it will provide an unexpected windfall to shareholders of Public Storage(PSA 1.26%). HPA has a portfolio of over 17,000 homes throughout the U.S. 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. Blackstone (BX.N) limited withdrawals from its $69 billion unlisted REIT on Thursday after redemption requests hit pre-set limits . BREIT outsources third-party pricing service providers to determine the fair value for these debt investments. 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. 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's non-traded REIT, BREIT, has agreed to acquire Preferred Apartment Communities for $25 a share, or $5.8 billion. Than BREIT I would try to get out of its properties located in Texas 17. 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