Blackstone Real Estate Income Trust has officially exited the self-storage space as it puts its financial weight behind its data center platform, QTS.
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The REIT has offloaded its last 79 self-storage assets, it announced in its second-quarter earnings report earlier this month. The sale brought in $852.3M in net proceeds and a net gain of $177.3M.
Blackstone's public REIT acquired the vast majority of those 79 properties, which total 5M SF, in 2019 and 2020, according to a March 31 presentation. BREIT began its exit three years ago when it sold a 9M SF portfolio to Public Storage for $2.2B.
BREIT doubled down on its data center segment during Q2, spending $3.3B in development through QTS. Those data centers are fully leased, it said, “in substantially all cases to investment grade tenants.” QTS' Q2 leasing is up more than 50% year-over-year, and its total first-half investment in preleased data center development has reached $5.7B, according to its second-quarter letter to shareholders.
“This transaction reflects our broader strategy of actively managing BREIT’s portfolio and investing in our highest-conviction investment themes,” a Blackstone spokesperson told Bisnow in an email. “Today, BREIT is ~90% concentrated in data centers, industrial and rental housing, and this positioning has been key to our recent performance, with BREIT delivering a +10.3% Class I net return over the past year.”
BREIT owns a 35.7% interest in QTS with a $1B book value, as part of Blackstone's joint venture that acquired the data center developer in 2021 for $10B.
AltsWire first reported the self-storage and data center details from BREIT's Q2 report.
During the second quarter, BREIT also sold 20 rental housing properties and 27 industrial properties. Those sales plus its self-storage dispositions totaled $2.1B in net proceeds with a net realized gain of $294M.
As of the end of June, BREIT had interests in 4,530 properties, the vast majority being rental housing, data centers and industrial assets, accounting for 42%, 27% and 20% of its assets, respectively. Most of its assets — 35% — are concentrated in the South, while the West accounts for 28% and the East accounts for 20%.
BREIT recorded a net loss of $466M during the second quarter, compared to its loss of $569M during the same period last year.
UPDATE, AUG. 14, 11:35 A.M. ET: This story has been updated to include a comment from a Blackstone spokesperson.
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