Blackstone Fund Withdrawal Requests Tick Down to $3.7B

Blackstone Real Estate Income Trust (BREIT) saw redemption requests from its $70B fund fall for the third consecutive month in July.

BREIT received $3.7B in redemption requests last month, a tick down from the $3.8% reported for June, and redeemed about $1.3B, about 34%, the company said in a letter to investors.

“We were pleased to see July repurchase requests decline meaningfully from the January peak. It was the lowest month of share repurchase requests this year,” Blackstone said, in a statement provided to GlobeSt.

Since Nov. 30, when BREIT began prorating redemptions, the fund has returned $9.4B to investors. BREIT has been exercising its right to limit withdrawals after requests exceeded 5% of the net asset value of the fund.

Redemption requests are not carried over from month to month—there’s no backlog—so BREIT investors must make several repeat requests to get the full amount they’ve requested. The firm indicated in a statement provided to GlobeSt. that investors who have made repeat requests since November are closing in on getting full payment.

“BREIT is a semi-liquid product and is working exactly as designed. A shareholder that has been submitting repurchase requests since November 30^th when proration began has received 94% of their money back,” Blackstone said.

As a non-traded REIT, BREIT has thresholds on how much money investors can take out of its fund in order to avoid forced selling of assets. In a Dec. 1 letter to investors, BREIT said redemption requests had exceeded its 2% of net asset value monthly limit and its 5% quarterly threshold.

BREIT disclosed that it received $4.4B in redemption requests in May, of which about $1.3B, or 30% were redeemed. The company said it redeemed $1.3B, or 29%, of the $4.5B of withdrawal requests it received in April, more than double the $666M (15%) that were redeemed in March.

Jon Gray, Blackstone’s president, said in a Q1 earnings call that he expects that the overall performance of the fund will be the most important factor in addressing investors’ concerns in coming months. According to the company, BREIT has delivered a 12% annualized net return since its inception and nearly three times the public REIT index.

“If we deliver, given the portfolio we built, the structure we’ve got here, this is working for investors—12% since inception, triple the public REIT index—that’s ultimately what matters,” Gray said.

“The portfolio positioning, that what’s matters, and then as that performance shows up, as markets become a little less volatile, then I think you’ll see a resumption of more positive flows,” he added.

BREIT’s portfolio is concentrated in the Sunbelt, with assets in top-performing sectors including logistics, data centers and student housing.