Blackstone, Starwood Now on Online Marketplace for Secondary CRE Trades

LODAS Markets, which runs an automated online marketplace that matches buyers and sellers of alternative and real estate investments, reports that the platform is now conducting transactions for both Blackstone Real Estate Income Trust (BREIT) shares and Starwood REIT.

“The first trade of Class D BREIT shares was executed in the LODAS marketplace at $14.42, which is equal to January’s NAV and just below February’s NAV of $14.47,” Brian King, LODAS Markets CEO, said in prepared remarks.

BREIT and SREIT’s participation on the platform is notable because of the surges of withdrawal requests that have been made to both funds, which limited redemptions at the time. The Financial Times had quoted Blackstone CEO Stephen Schwarzman as saying at an industry conference, “The idea that there is something going wrong with this product because people are redeeming is conflating completely incorrect assumptions. This was not meant to be a mutual fund with daily liquidity. These are pieces of real estate.”

In both cases, Asian investors who used higher levels of leverage and faced domestic margin calls were the source of many of the redemption requests. However, the dynamic shows that in uncertain and volatile times, depending on direct purchases and redemptions alone can add risk to an investment.

LODAS, which stands for Liquidity On Demand As a Service, launched as Realto in 2021, with its first transactions being Class B restricted shares of grocery-anchored shopping center owner and operator Phillips Edison & Company, according to the company. In May of 2022, the company closed a $4.5 million funding round that it said would go to growth and expansion.

“Today, the LODAS marketplace has nearly $1 billion in total buy-side interest and more than 30 funds being traded,” the company claims. “All trades are paperless, potentially executed in a day, and settled in as quickly as five days. It’s significantly faster than the multi-week process that’s been the standard.”

The company added, “Buyers and sellers of BREIT, SREIT and other funds can be matched in the LODAS marketplace. Investors can access immediate liquidity, while the number of redemption requests is potentially eased, along with the likelihood of funds having to sell other assets to meet demand.”