The nation’s largest nontraded REIT has fulfilled 88% of requests from investors looking to cash out their shares.
Blackstone Real Estate Investment Trust said the repurchase payout is at its highest percentage since proration began and essentially clears all requests, which have fallen nearly 80% since peaking in January 2023.
Of the $1.3B worth of requests received in January, BREIT is fulfilling about $1.1B, executives wrote in a Feb. 1 letter to shareholders.
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The move implies the tide may be turning for BREIT, which recorded its worst year for annual returns in 2023.
“The last two years have been characterized by a historic rise in interest rates and heightened market volatility,” BREIT executives said in the letter. “Over this period, BREIT has continued to deliver resilient performance and preserve capital for our investors. As we look ahead, we believe we are at an inflection point and there are several reasons for optimism.”
Nontraded REITs began limiting redemptions in late 2022 as market volatility increased. Those who were able to cash out did, with payouts topping $17.4B in the first 11 months of 2023, up from $12B in all of 2022.
In December, BREIT received $1.1B in redemption requests and was able to pay out $569M, or about 52%.
A decline in inflation and interest rates, paired with a decline in construction across BREIT’s key sectors, should buoy investments moving forward, executives said.
“Moments of volatility, like today, create dislocation and opportunity to play offense for seasoned investors, and we intend to continue deploying capital into BREIT’s high conviction themes,” they wrote.
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