Blackstone Limiting Withdrawals From Real Estate Fund To Avoid 'Liquidity Mismatch'

345 Park Ave.
345 Park Ave. In New York City, Where Blackstone Keeps Its Headquarters.

Blackstone's nontraded real estate fund Blackstone Real Estate Income Trust Inc. will limit withdrawals after requests exceeded limits set by the fund to prevent "a liquidity mismatch," Bloomberg reported Thursday.

Withdrawal requests were more than 2% of the net asset value, which is the monthly limit, and more than the 5% threshold that's allowed per quarter, Bloomberg said.

The fund owns $69B in assets, including logistics, rental housing and hotels.

Over the last few years, "the fund has been one of the big sources of Blackstone’s growth in assets under management, alongside a private credit fund called BCRED," the Financial Times reported. But in recent quarters, "rising redemption requests from both funds have worried analysts as a signal of stalling asset growth."

Blackstone met just 43% of redemption requests from fund investors in November, according to a notice it sent to investors on Thursday, the FT said. In October, the REIT received redemption requests totaling $1.8B, or roughly 2.7% of its net asset value.

The low interest rates that fueled the REIT's growth in previous years have now vanished, leaving it to struggle with a challenging economy and sky-high borrowing costs, Bloomberg said. And there are indications that there could be more restrictions in the future.

The fund has received redemption requests in November and December that are beyond the quarterly threshold. About 70% of those requests are coming from Asia, FT said.

News of the restrictions on withdrawals sent Blackstone shares tumbling almost 8% late Monday morning in New York, Bloomberg said.

Blackstone Real Estate Income Trust announced Thursday that it was selling its stake in the Las Vegas MGM Grand and Mandalay Bay hotels, generating $700M for the fund.

“The sale ... enables us to further concentrate BREIT’s portfolio in its highest growth sectors, including logistics and rental housing,” Blackstone Real Estate Senior Managing Director Scott Trebilco said in a statement.

Continue reading this story with a free account

Log in or register
Related Topics: Blackstone , Blackstone REIT
Sign up for more articles like this
Subscribe to Bisnow's National Newsletters
Related Stories

Toys R Us Plans 120 New Stores Ahead Of The Holidays

Philly's Busy Summer Created Momentum. Can The City Turn It Into Long-Term Growth?

Data Center Leaders Aren't Sweating Calls For An AI Slowdown

REPORT: Amazon Eyes Next Industrial Push With Plans To Expand Same-Day Deliveries

First Rate Hike Since 2023 Lands Atop 5% Treasury Yield, Ratcheting Up Capital Pressure

Stockdale Hires Fortress Exec To Launch Debt Business

Inside The Nationwide Jockeying For Opportunity Zones 2.0

GTIS Partners Rebrands As Brightshore Capital, Launches $250M Debt Platform

Data Center Spills 5,000 Gallons Of Fuel Into New Jersey River

Hines And Rialto Close Office Credit Fund At $1.1B

Chipotle Adding Hundreds Of New Locations Worldwide

'Beyond A Routine Wobble': 10-Year Treasury Clears 5% Ahead Of Key Fed Meeting