Blackstone Limits Investor Withdrawals From $145 Billion REIT As Economic Concerns Grow
Requests Jump for Redemptions From Its Nontraded Real Estate Investment Trust
Blackstone has limited withdrawals from its nontraded real estate investment trust after large numbers of investors sought redemptions, making it the latest firm to take such a step as global economic concerns grow.
Blackstone Real Estate Income Trust, also known as BREIT, allowed investors to withdraw $1.3 billion in November. That represented about 43% of the redemption requests it received, according to a report by the Financial Times citing a notice the private REIT sent to investors on Thursday. BREIT had nearly $145 billion in total assets as of Sept. 30.
Investors can redeem up to 5% of their holdings in a quarter, at which point Blackstone can limit withdrawal requests to prevent a forced sale of its real estate holdings.
The move comes as real estate investors express concern about how rising interest rates and an economic slowdown would affect the commercial property market. The Federal Reserve has raised interest rates to record highs this year as inflation remains at relatively high levels.
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Other firms limiting redemptions from funds include London-based asset manager M&G, which restricted institutional investor redemptions from a U.K. property fund. The moves follow Schroders and BlackRock, along with Columbia Threadneedle's, imposing redemption limits on some property funds open to institutional investors.
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However, given increased calls for redemption from investors, BREIT is showing a willingness to sell properties. On Thursday, BREIT announced that it is selling its 49.9% interest in the MGM Grand Las Vegas and Mandalay Bay Resort and Casino real estate to its partner Vici Properties for $5.5 billion.