Este botn muestra el tipo de bsqueda seleccionado. Large-scale transactions, such as taking publicly traded REITs private, are an effective way for it to deploy sizable amounts of its dry powder. Florence Chong speaks to Anil Reddy You need to be a registered user to read this content We take a look at two attractive REITs trading significantly below their net asset values. I am not receiving compensation for it (other than from Seeking Alpha). Some investors are seeking liquidity to cover losses incurred elsewhere. Proof in point: BREIT just had to limit withdrawals because too many investors are currently seeking to get out of it. Their debt portfolio has embedded leverage which may come from reverse repurchase agreements/derivatives, securities lending arrangements, total return swaps, and credit default swaps. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. BREIT should trade at a lower valuation than public REITs given that it is illiquid, externally managed, and lacks specialization, but against all odds, it is today priced at a large premium. For a more comprehensive brief of BREITs real estate investment portfolio, refer to the table below. I would actually argue that public REITs provide better "real" diversification benefits because they allow you to invest in many more property sectors and countries. For the first half of 2021, the NAV price soared high with Class S shares at the top values at $12.92/share (July 2021). Those sectors are benefiting from long-term tailwinds and inflation. , Blackstone will likely continue its real estate shopping spree. This button displays the currently selected search type. Raven Select Service Portfolio, Hyatt Regency Atlanta (GA), JW Marriott San Antonio Hill Resort (TX), etc. The information in his articles and his comments on SeekingAlpha.com or elsewhere is provided for information purposes only. However, net losses have been incurred since 2017 which can be attributed to the real estate debt portfolio. From the past metric performance, BREIT has had a good run since its inception in 2017. Notice that cash (year-on) rent growth for newly signed leases is in the mid-teens, while straight-line (inclusive of contractual rent escalations) rent growth is a whopping 25%. A majority (by 89%) of BREITs income comes from rental revenues across a diverse set of asset classes much of it comes from residential and industrial sectors. It invests in real estate properties across 8 sectors and real estate debt through mortgage-backed securities and other real estate-related loans. This is surely a huge factor in the discount at which BSR typically trades. Update 2018-05-11: Blackstone reports that it's leverage has increased from below-average 41% to above average 60% (average for core plus is 50%). Real estate major DLF has no plans to launch public offer of REIT in the next one year to monetise its rent-yielding commercial properties, its CEO Ashok Tyagi said. Please disable your ad-blocker and refresh. Blackstone claims that its REIT is superior to others. Overall, investors have handed Blackstone $83.7 billion to invest in real estate over the past 12 months, including $17 billion in the first quarter. Cost basis and return based on previous market day close. The deal will add a large-scale portfolio of business park, office, and industrial assets to Blackstone's burgeoning real estate portfolio. Jussi is also the President of Leonberg Capital - a value-oriented investment boutique specializing in mispriced real estate securities often trading at high discounts to NAV and excessive yields. Though Blackstone sometimes acquires individual real estate properties, such as The Bellagio in Las Vegas, it more often seeks opportunities to scoop up whole portfolios that will move the needle. Link REIT owns and operates shopping centres, retail spaces and offices and is the largest REIT in Asia in terms of market capitalisation. Using different valuation methods, real estate services firm Jones Lang LaSalle (JLL) recently posited that REITs' discount to NAV is over 15%, commenting that a "sustained dislocation in public and private values could be a precursor of opportunities for fundamentals driven private market participants, leading to take-private M&A.". They always want to grow because it maximizes the fees that they own. Although Santarelli kept his price target for Gaming & Leisure Properties Inc. at $60 per share, he bumped his . Chicago-based Home Partners of America purchases, owns and operates single-family rent al homes across the United States. Jussi Askola is a former private equity real estate investor with experience working for a +$250 million investment firm in Dallas, Texas; and performing property acquisition in Germany. Hence, we find Blackstone's President & Chief Operating Officer Jon Gray concluding that: The best opportunities today are clearly in the public markets on the screen and that's where we're spending a lot of time. We spend 1000s of hours and over $100,000 per year researching the market for the most profitable investment opportunities and share the results with you at a tiny fraction of the cost. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Global investment firm Blackstone-sponsored Nexus Select Trust has filed the draft paper with market regulator Sebi to launch India's first public issue of retail REIT to raise around US$ 500 million (about Rs 4,000 crore), sources said. LONDON, Dec 2 (Reuters) - While there has been little wider fallout from this week's surge in redemption requests at an unlisted Blackstone real estate income trust (REIT), it is being read by some as a warning sign. If we were just investing in BREIT, we would miss these opportunities to gain geographic diversification. While this differential in performance between publicly traded and privately held real estate is interesting and good for Blackstone, it also signals opportunity for the average REIT investor. The acquisition represents about 1.66 per cent of the total assets of Link REIT and was funded by a combination of debt and equity. Asset management giant Blackstone (BX) boasts a portfolio of assets under management reaching nearly $1 trillion, made up largely of real estate. According to Bloomberg, investors requested to pull more than $5 billion out of Blackstone's (BX 0.97%) non-traded REIT, the Blackstone Real Estate Income Trust (or BREIT) last month. The company reports its financial statements and regular updates through SEC filings for public reference. It is heavily invested in rapidly growing sunbelt markets. Blackstone managed a total of $236 billion of wealth held by individuals as of the end of September, up 43% year-on-year. The total revenue coming from rental income also seems to increase consistently. STAG is a ~$10 billion enterprise value industrial REIT specializing in higher yielding, single-tenant net leased properties largely in secondary and tertiary markets. Last but not least, since REITs are today priced at large discounts to fair value, they also pay a higher yield and offer a lot greater upside potential. Excellent. To liquidate their assets, BREIT must repurchase their shares, which is not guaranteed. With public REITs, you have much more flexibility. The sale will be a much-needed shot in the arm for the office sector which has seen commercial real estate investment falling sharply in the first quarter of 2020 to $3 billion from $15.9 billion in the previous quarter. Blackstone has agreed to pay $187.50 per share in cash for PS Business Parks, a roughly 15% premium to its average share price over the last two months. It results in significant economies of scale and better aligns interests with shareholders because they earn salaries based on their performance and not just the mere size of the company. It is today priced at just 35 cents on the dollar due to the war in Ukraine and we think that it is very opportunistic. That's one of, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Motley Fool Issues Rare All In Buy Alert, Copyright, Trademark and Patent Information. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Blackstone Inc. agreed to buy student-housing owner American Campus Communities Inc. in a deal valuing the company at about $12.8 billion, including debt, a bet that rents will continue to rise as . The trust's managers said last month they were reviewing options after receiving an unsolicited expression of interest to buy out all its stapled securities. While it has steadily put that money to work, cash continues flowing into BREIT's coffers because of its growing reputation for delivering top-tier returns. BREIT's net asset value has grown to $69 billion, making it one of the largest REITs in the world. In a regulatory filing last month, Blackstone said that it has secured $24.1 billion of commitments for its latest real estate fund called Blackstone Real Estate Partners X. The company will likely continue to battle this headwind until it works through its current backlog. The industry leader for online information for tax, accounting and finance professionals. If you have an ad-blocker enabled you may be blocked from proceeding. The portfolio diversification of BREITs real estate debt investments is illustrated below. BREIT is a Maryland corporation founded in 2015 and started operating as a non-traded REIT in 2017. It gets paid a 1.25% of the NAV each year as well as 12.5% of the annual total return subject to a 5% hurdle. BREIT outperformed the MSCI U.S. REIT Index net return in 2020 (-7.6%) with a 6.1% net return of Class S shares which has the most number of stockholders among its common shares. And management is also skilled and motivated, as insiders own around 40% of the company. Blackstone has outperformed the market over the past 15 years by 5.0% annually. Were working to restore it. Click here to learn more!. Despite the COVID-19 pandemic, BREIT achieved a 6.1% net return in 2020 for the Class S shares which has the most number of stockholders among its common shares. Philadelphia, PA, January 24, 2022 - Resource REIT, Inc. (the "REIT" or the "Company"), a publicly registered non-traded real estate investment trust, announced today that it has entered into a definitive agreement with Blackstone Real Estate Income Trust, Inc. ("BREIT"), under which BREIT will acquire all of the outstanding shares of common stock of the REIT for $14.75 per share . The sale was part of Blackstone's acquisition of the Scentre Group office portfolio in August 2019 and Link's financing was completed late last week. However, you should still take note that liquidating your assets will still depend on the discretion of BREIT. Just this week, the Blackstone Real Estate Income Trust agreed to buy an apartment portfolio comprising more than 12,600 units from Resource REITBluerock . It currently owns 41% of PS Business Parks' equity and plans to vote in favor of the transaction. In addition to having passed all CFA exams, Jussi holds a BSc in Real Estate Finance from University Nrtingen-Geislingen (Germany) and a BSc in Property Management from University of South Wales (UK). Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. In addition to having passed all CFA exams, Jussi holds a BSc in Real Estate Finance from University Nrtingen-Geislingen (Germany) and a BSc in Property Management from University of South Wales (UK). What Blackstone's REIT Acquisition Spree Is Telling Investors, Blackstone Is Becoming a Real Estate Powerhouse, 2 FAANG Stocks Billionaires Are Selling in Droves and 1 They Can't Stop Buying, 3 Stocks That Could Join Apple, Microsoft, and Alphabet in the $1 Trillion Club, 1 Bargain-Basement Warren Buffett Stock Down 78% to Buy Before It Starts Soaring, 2 Growth Stocks That Can Turn $250,000 Into $1 Million by 2030, With billions of dollars in dry powder across its real estate private equity funds and cash continuing to pour into its funds. "The impact on Blackstone depends on whether the REIT is able to stabilize its net asset value over time, or is forced to enter an extended run-off scenario, with significant asset sales and ongoing redemption backlog too early to tell, in our view," BMO Capital Markets analysts wrote in a note. BREIT has a diverse real estate property portfolio. These properties are overwhelmingly concentrated in Texas, especially Austin, Dallas/Fort Worth, and Houston. Private equity giant Blackstone Group plans to purchase 66 residential complexes in San Diego County for more than $1 billion in one of the biggest real estate transactions in local history. That has put STAG at a 30% discount to NAV, one of the steepest discounts in its history as a public REIT. For FY 2020, Class I shares were still the highest ($0.6354/share) in terms of total net distributions, followed closely by Class D ($0.608/share). It is impossible to predict with any certainty, because last year Blackstone acquired data center REIT QTS Realty, and in 2018 it acquired hospitality REIT LaSalle Hotel Properties. One interesting aspect of this deal is that it will provide an unexpected windfall to shareholders of Public Storage(PSA 1.26%). Blackstone is able to purchase giant holdings in a . Blackstone has been seeking to diversify its investor base after tapping institutional investors, such as public pension funds, insurance firms and sovereign wealth funds, for its products for decades. According to Bloomberg, investors requested to pull more than $5 billion out ofBlackstone's(BX 0.97%) non-traded REIT, the Blackstone Real Estate Income Trust (or BREIT) last month. Like the BPP funds, BREIT doesn't buy fixer-uppers. CRE Herald. HPA's unique, resident-led business model expands housing access and choice, while providing a clear path to . Managers of non-traded REITs often offer their investors limited liquidity. "Our business is built on performance, not fund flows, and performance is rock solid," the spokesperson said. Clicca su Gestisci impostazioni per maggiori informazioni e per gestire le tue scelte. I have no business relationship with any company whose stock is mentioned in this article. BREIT had been a big growth driver for Blackstone. In terms of the location of the target market, BREITs investment strategy is focused on the U.S. market. [added emphasis]. They and other analysts said Blackstone's REIT runs the risk of getting caught in a spiral of selling assets to meet redemptions if it cannot regain the trust of its investors. Each type of share has a par value of $0.01. But that's not due to any issues with the REIT itself. Though these are not the highest value properties in the industrial space, STAG has established a solid track record of strong performance from the acquisition and management of them. The continued surge in such requests has kept the pressure on Blackstone's stock price. Matthew DiLallo has positions in Blackstone and has the following options: short June 2023 $60 puts on Blackstone. Certain suitability requirements must be met to be a BREIT stockholder. Associate Director at Atlantic Group. As of July 2021, BREIT has a total of 1,508 real estate properties in the . Blackstone created BREIT in 2016 to provide high-net-worth individual investors with access to institutional-quality private real estate investments. The U.S. real estate investment trust, or REIT, sector was hit abnormally hard during the 2022 bear market. The stock has a fifty day moving average price of $22.70 and a 200 day moving average price of $24.69. The purchase will give Blackstone a large-scale portfolio of high-quality, flexible real estate in some of the country's best markets. As such, many REITs are now priced at large discounts relative to the underlying value of the real estate they own. Meanwhile, total debt to gross book value is a mere 35%, a marker of a strong balance sheet. Ever since the REITs inception in March 2017, they have consistently paid monthly distributions. The deal values the, One interesting aspect of this deal is that it will provide an unexpected windfall to shareholders of. Like Salesforce.com, inc. (NYSE:CRM), Roblox Corporation (NYSE:RBLX), and Advanced Micro Devices, Inc. (NASDAQ:AMD), HubSpot, Inc. (NYSE:HUBS) is a stock that many elite hedge funds have been . Blackstone continues making major deals across the multifamily sector by planning to acquire Bluerock Residential Growth REIT in an all-cash . As an equity REIT, they have a diverse coverage of real estate investments. This implies that the REIT was able to sell properties at a significant gain from its original purchase price. If you can't get your money back, does the "paper valuation" then have any meaning? Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Even if Blackstone does not acquire BSR or STAG, we think both REITs will perform well in the future. I think that the risk-to-reward of these discounted public REITs are far better. Making the world smarter, happier, and richer. Blackstone's public non-listed REIT, BREIT, has been one of the best-performing REITs of this year.It has managed to deliver a 9% total return with low volatility even as the public . In addition, it had commitments to deploy another $9.4 billion across its public U.S. REIT privatizations and a deal to buy an Australian casino operator. The spokesperson added that the REIT relied on a long-term fixed rate debt structure, making it resilient. They have outperformed the MSCI U.S. REIT Index which generated only -7.6%. Their recent property acquisitions recorded as of June 2021 were 15 investments 17 residential properties, 28 industrial properties, and 1 office property amounting to $2.1B. Blackstone told investors in a letter it would curb withdrawals from its REIT after it received redemption requests in November greater than 2% of its monthly net asset value and 5% of its quarterly net asset value. Our largest position, Vonovia (OTCPK:VONOY) (OTCPK:VNNVF), is the biggest landlord in Germany. Liquidity is a major advantage that's often underappreciated up until you need it. And apparently this is the new target. As of FY 2020, BREITs real estate debt investments consist of 194 investments in CMBS, 15 investments in RMBS, 10 corporate bond investments, and 9 real estate loans. Usually, these distributions are credited 20 days after the end of every month. Try it Free for 2-Weeks. Tombol ini menampilkan jenis pencarian yang dipilih saat ini. Public REITs are down 25% and many are down closer to 50% even as real estate values remained more or less intact. I have no business relationship with any company whose stock is mentioned in this article. There are literally no signs of a slowdown yet for STAG's industrial real estate, and yet the market has punished STAG with a ~35% selloff this year. Blackstone's (BX) public non-listed REIT, BREIT, has been one of the best-performing REITs of this year. New York, June 22, 2021 - Blackstone Real Estate Income Trust, Inc. ("BREIT") announced today that it has entered into a definitive agreement to acquire Home Partners of America ("HPA"), valuing the company at $6.0 billion. This is to avoid market volatility especially with factors that do not directly relate to real estate. BREITs occupancy rates are all above 90% for almost all sectors, with the exemption of the hotels/hospitality sector. Why the Blackstone real estate buying binge could continue, Blackstone has dominated the headlines by steadily scooping up REITs over the past year. Contrary to traded REITs, BREIT invests in perpetual-life REITs wherein NAV prices are valued daily or monthly with a limited liquidity period. They are also open to venturing into healthcare and data center sectors. As a result, the REIT allowed investors in November to redeem $1.3 billion, equivalent to approximately 43% of investors' repurchase requests. Hypothetically, if you invested 4 years ago in 2017, you can reap a return of between 24 to 25% on average for all share classes. Blackstone Real Estate Income Trust, Inc. (B REIT) has agreed to acquire Home Partners of America (HPA) for $6 billion. Certain parameters from financial statements will tell you how the company managed its investments through the ups and downs of the business cycle. BREIT is an externally-managed REIT. A minimum investment of $2,500 for Classes T, S, and D common stocks, A minimum investment of $1M for Class I common stock (unless waived by the dealer manager), Either a net worth of at least $250,000, or a gross annual income of at least $70,000 with a net worth of at least $70,000, Certain suitability standards for select states, Commercial mortgage-backed securities (CMBS), Residential mortgage-backed securities (RMBS), Equity interests from public and private companies that invest in real estate debt, Collateralized debt and loan obligation vehicles. Does the Stock Market Have You Down? KentWeakley. He has authored award-winning academic papers on REIT investing, been featured on numerous financial media outlets, has over 50,000 followers on SeekingAlpha, and built relationships with many top REIT executives. In the first quarter, same-community net operating income surged 16.3% year-over-year on the back of rent growth for new leases of 17.4% and renewals of 9.0%. Just because something isn't quoted does not mean that it isn't correlated or volatile. We do not believe it is a good idea to buy a REIT simply because it looks like an attractive buyout prospect for big-money asset managers and private real estate funds. Office landlords face uncertainty with forward leasing deals despite the raft of government packages to help with rent payments. The 28,385 square metre building is 10-storeys and was redeveloped in 2010-11 as part of the Westfield Sydney redevelopment. As of July 2021, BREIT has a total of 1,508 real estate properties in the residential, industrial, net lease, self-storage, hotel/hospitality, retail, and office sectors located across the U.S. BREITs occupancy rates are all above 90% for almost all sectors, with the exemption of the hotels/hospitality sector which was heavily affected by the COVID-19 pandemic. 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