Blackstone Blocks Withdrawals From its Flagship Real Estate Trust
In January, Blackstone blocked withdrawals from its real estate income trust (BREIT).
These events followed a surge in redemption requests from investors wanting to cash out.
The $69 billion real estate income trust said it fulfilled redemption (BREIT) requests of about $1.3 billion in January, representing 25% of the approximately $5.3 billion total withdrawal requests it had received during the month.
Blackstone began blocking investor withdrawals from BREIT in November last year after receiving requests that exceeded a preset 5% of the fund’s net asset value.
Expectations dictate that redemption requests will remain at an elevated level. Blackstone President Jonathan Gray had said during an analyst earnings call last week that this will normalize.
What is Blackstone?
Blackstone is a global investment firm that was founded in 1985. It specializes in private equity, real estate, hedge fund solutions, credit, and secondary fund of funds solutions. Blackstone is one of the world’s largest alternative investment management firms, with a diverse portfolio of assets across multiple industries and geographies.
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What is a REIT?
A Real Estate Investment Trust (REIT) is a type of investment vehicle that allows individuals to invest in income-generating real estate properties.
Real Estate Investment Trusts are designed to provide investors with a way to access the benefits of real estate investment, including regular income and potential for capital appreciation, without the need to own or manage physical real estate assets directly. This investment vehicle holds and operates income-generating real estate assets, such as apartments, hotels, office buildings, and shopping centers. They generate revenue primarily through rent payments from tenants. The income generated from these properties is then distributed to the shareholders of the REIT as dividends.
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