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BREIT withdrawal requests drop to 11-month low

Blackstone’s fund returned 29% of requests

BREIT Withdrawal Requests Drop to 11-Month Low
Blackstone president Jon Gray (Illustration by The Real Deal with Getty)

Brighter days have arrived for Blackstone Group’s real estate investment trust after a dim year.

Blackstone Real Estate Income Trust in September recorded its lowest level of withdrawal requests in 11 months, Bloomberg reported. A stockholder letter released this week says nvestors requested to pull out $2.1 billion last month, 28 percent below what they requested to redeem the previous month. 

The real estate fund is still limiting distributions to the amount of funds investors want back, but the gates seem to be creaking open. BREIT returned 29 percent of redemption requests last month, roughly $625 million in all.

A major share class for the $67 billion fund has posted a 3.5 percent return this year, through August. That performance lags behind the 8.4 percent return in 2022 and 30 percent return in 2021, but BREIT is still pulling itself out of the woods.

Late last year, a selloff in Asia sparked an investor pullback. Investors began requesting redemptions in large spates, forcing BREIT to limit withdrawals from the fund.

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In January, the University of California provided a $4 billion endowment to BREIT, which took the form of a common equity commitment with a six-year lock, enhanced by a $1 billion commitment from Blackstone itself. The university later threw an additional $500 million into the pot.

BREIT also shifted its priority for property holdings, helping its own recovery along. A large majority of the REIT’s portfolio is centered on the multifamily market, industrial real estate and data centers in the Sun Belt. It has no exposure to commodity offices and malls.

Since BREIT launched at the start of 2017, the fund has delivered a 12 percent annualized net return, according to the letter this week. In the last year, it has outperformed non-traded REITs by 8.2 percent.

— Holden Walter-Warner

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Blackstone GroupJonathan Gray
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