Blackstone’s flagship real estate fund had its best fundraising quarter since 2022 and delivered a modest return in the third quarter even as it wrote down nearly $500M in asset value from its balance sheet.
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Blackstone Real Estate Income Trust, better known as BREIT, recognized $496.7M of impairment charges tied to 14 commercial properties and various single-family rental homes in the third quarter, up from $27.4M over the same period a year prior, Blackstone disclosed in quarterly filings on Nov. 6.
BREIT returned 2% to investors in the third quarter, bringing the year-to-date return to 7.3%. The fund had its second consecutive quarter of positive net flows, with subscriptions up about 40% from last year, the nontraded REIT said in a third-quarter disclosure.
Impairments jumped in the third quarter because of 13 rental housing properties, one office property and single-family rentals, along with $43M in held-for-sale real estate write-downs. BREIT didn’t identify the specific properties.
The fund has sold $7B worth of noncore assets in 2026, including its remaining self-storage and manufactured housing portfolios, and redeployed capital into data centers and industrial assets.
BREIT deployed $3.4B into preleased data center developments through QTS, the data center firm Blackstone took private in 2021, in the third quarter, bringing its year-to-date deployment into the sector to roughly $9B.
The nontraded REIT owns 34.8% of QTS as of Sept. 30, and its investment in the firm accounts for 29% of its real estate value, a larger share of its portfolio than its 20% industrial allocation and 17% in multifamily assets.
BREIT also sold 65 rental housing properties, nine industrial properties and one office property in the third quarter for a combined $2B in proceeds and a net realized gain of $366.1M that was offset by the quarter’s impairments.
Total assets at BREIT have fallen from $98.6B at the end of 2025 to $88.9B at the end of September. Since its inception nearly a decade ago, BREIT has delivered a 9.3% annualized net return to investors, roughly 55% higher than publicly traded REITs.
BREIT management continued to take a positive view of the commercial real estate landscape in their third-quarter letter to investors.
“Strengthening fundamentals continue to reinforce the real estate recovery. Supply is a leading indicator for real estate and the primary reason we remain bullish today,” they wrote.
The elevated interest rate environment is “a relevant factor for real estate,” but BREIT believes “a portfolio built around cash flow growth and anchored to long-term fundamentals can continue to deliver over time, even in a higher rate environment.”
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