Rachel Ridley’s Post

"A Blackstone Inc. real estate trust for wealthy investors notched a 0.5% loss in 2023, the lowest annual return since its 2017 debut. Blackstone Real Estate Income Trust’s gains fell short of the threshold that would allow the asset manager to partake in profits. The firm can take a share of total returns as long as BREIT deliversat least 5% for the year. This marks the first year the trust has fallen short of the mark to earn carried interest, which rewards dealmakers for generating returns and is a major incentive for the industry. (...) The fund’s muted results in 2023 shows that BREIT hasn’t been immune to rising interest rates and a slowing property market that has pressured returns. The trust’s return lagged behind the 26% total return of the S&P 500. BREIT returned 8.4% in all of 2022 and more than 30% in 2021. It now sits on roughly $62 billion in net asset value. BREIT’s 1.2% loss in December — a result of hedges that declined in value when key borrowing rates fell late 2023 — pulled down the year’s performance. Blackstone had enlisted interest-rate hedges to mitigate the pain from soaring borrowing costs. The firm said in a memo that even if there might be some immediate sting, sustained lower rates will lift real estate values across the fund’s portfolio. (...) Clients ratcheted up requests to pull cash in 2022, forcing BREIT to enforce its redemption limits. BREIT has returned $14.3 billion of investor cash since Nov. 30, 2022, according to a shareholder letter this month."

As the 10-year Treasury inches toward stabilization and oversupply in key markets dissipates by 2025, we anticipate a surge in rent growth. 📈 Multifamily investments are poised for a robust recovery, presenting savvy investors with a golden opportunity to capitalize on exciting prospects. 🏠💼 Seize the moment and unlock the potential for unparalleled success in the real estate market! Take advantage of our newest investment opportunity acquired at an incredible basis of $146k a door! Click here to learn more: https://lnkd.in/gVzah7aB #passiveinvesting #passiveincome #buildingwealth #multifamilyinvestor #investing #realestateinvestor #propertyinvestment #investmentopportunity #investmenttips

“Blackstone’s Beleaguered Real-Estate Fund Stems Exodus” The Wall Street Journal article posted in the comments below 👇 offers insight into the challenges confronting Blackstone’s real estate fund, Breit, amidst market uncertainty. It also discusses the experiences of major players like KKR, Starwood Capital Group, and Brookfield Asset Management, providing a broader perspective on the nontraded REIT landscape. Breit, launched by Blackstone in 2017, aimed to allow individual investors to access commercial real estate assets. It reached a peak net asset value of over $70 billion, inspiring similar offerings from competitors like Starwood Capital Group, Brookfield Asset Management, and KKR. The strong performance of nontraded REITs from 2017 to mid-2022 was disrupted by rising interest rates and falling real estate prices, causing investor anxiety and increased redemption requests. To safeguard shareholder value, Breit and other funds implemented withdrawal limitations to avoid forced asset sales at discounted prices. Blackstone's optimistic outlook highlights positive trends like lower borrowing costs and reduced property construction pace. However, investor caution persists due to concerns about market volatility, Federal Reserve Board policy changes, rising defaults, and oversupply in rental markets. Despite Blackstone's reassurances, Breit's fundraising struggles continue as investor confidence remains subdued. KKR and Starwood Capital Group, alongside Breit, face similar challenges with investor redemptions and adapting to market changes. These experiences reflect broader trends in the commercial real estate market, providing valuable insights into its complexities and dynamics. Do you anticipate retail investors opting for publicly traded REITs over private ones due to their increased liquidity? Share your thoughts in the comments below 👇! Please like 👍, comment below 👇, or share 👉. Click the 🔔 in my profile to get notified of my posts. And follow me for more content like this. #home #multifamily #homerental #buildtorent

"GP-led secondaries, such as portfolio recapitalizations, fund restructurings, and continuation vehicles, enable the manager to retain high-quality assets that still have the potential to increase in value with more time and capital. This segment of the secondaries market is poised to grow substantially due to debt maturities, fund life expirations, capital shortfalls, delayed business plans, and investor liquidity pressure." Check out the full article in Bisnow with commentary from Park Madison's Brian Di Salvo! https://lnkd.in/g-iQHCen

🏡💼 As a real estate professional, have you considered the opportunities arising from the current volatility in commercial real estate? 💰📈 - Global real estate funds are sitting on $544 billion in cash, ready to invest in distressed properties. - Owners facing higher debt-service costs are attracting investor interest for rescue capital. - Commercial property distress has risen to $85.8 billion, creating potential for strategic acquisitions. - With over $2.2 trillion in commercial mortgages maturing soon, the market dynamics are shifting. Despite challenges, the availability of capital for distressed assets signals a different outcome compared to past crises. Embrace the evolving landscape and explore new possibilities in real estate investment. 🌟🔑 #RealEstateOpportunities #CommercialProperty #InvestmentStrategies #MarketInsights #PropertyDistress #RealEstateInvesting

"U.S. real estate investment trusts today manage $4.5 trillion in real estate worldwide. ... Top performing REIT sub-sectors in recent years include data centers, self-storage properties, residential housing and tower REITs." #selfstorage #REIT #SP500

In an end-of-2023 annual report and letter to stockholders, KKR Real Estate Select Trust Inc., a ’40 Act closed-end fund that qualifies for tax treatment as a real estate investment trust, highlighted its 5.78% net distribution rate (for Class I shares) during a year in which real estate performed poorly, as reflected in the fund’s delivery of a -6.25% net total return for the year. Since its inception in 2021, the fund has provided annualized net total returns ranging from 8.9% (Class I shares) to -7.08% (Class S shares).   KKR Ralph Rosenberg Billy Butcher Julia Butler #alternativeinvestments #annualreport #KKRRealEstateSelectTrust #realestateinvestmenttrust #REIT #nettotalreturn

Following a challenging year where shareholders hastily withdrew funds from prominent non-traded real estate investment trusts, private wealth investors are now indicating a return of confidence in real estate. While institutional investors express increased optimism, retail investors are still proceeding with caution. Julia Butler KKR | David Auerbach Hoya Capital Real Estate | Dana Petitto Brookfield REIT | Miriam Hall #PERE #RealEstate #Investors

The Ripple Effect Investors in Blackstone's Real Estate Income Trust, Unnerved by Starwood's Liquidity Issues, Withdraw Their Money "A $59 billion Blackstone Inc. property trust is contending with the fallout from a rival’s decision to enforce stricter limits on investors. Repurchase requests by investors in Blackstone Real Estate Income Trust ticked up in May, according to a shareholder letter Monday, after rival Starwood Real Estate Income Trust tightened limits. Starwood’s decision further chilled investor sentiment about a real estate sector hammered by rising rates. BREIT’s board agreed to allow the trust to exceed a 2% monthly limit in order to be able to fulfill all of its withdrawal requests in May. Across April and May, BREIT has returned about 4.4% of its net asset value to investors. https://lnkd.in/e2huu_9p

Blackstone is getting ready to deploy its $66B stash. 👀 With property transactions down 45% YoY, private equity funds have spent most of the year sitting on a massive $300 billion in 'dry powder.' But as 2024 approaches and 40% of floating rate loans expire in the first half of the year, PE firms are poised for a potential spending spree to seize opportunities in a recovering economy—particularly debt funds. Read more 👉 🔗 https://lnkd.in/ebabUXC5 Today’s issue is brought to you by First National Realty Partners (FNRP). #debt #privateequity #funds #blackstone #realestate #capital #pe #credaily #commercialrealestate #distress #economy #interestrates #capitalmarkets #fund #newsletter