Blackstone Fund Redemption Requests Keep Dropping

Redemption requests for Blackstone Real Estate Income Trust’s (BREIT) fund dropped for the fifth consecutive month in September.

BREIT said in a letter to stockholders that it received $2.1B in redemption requests in September, a 28% drop in requests over the amount investors sought to pull out of the $67B fund in August.

“We were pleased to see September repurchase requests decline meaningfully from the January peak to the lowest level since October 2022,” Blackstone said, in a statement provided to Globe St.

BREIT fulfilled $625M, or about 29% of the amount investors requested in September.

“A shareholder that has been submitting repurchase requests since November 30th, when proration began, has received approximately 97% of their money back,” the company said.

Since November 30, when BREIT began exercising its right to limit withdrawals after requests exceeded 5% of the net asset value of the fund, BREIT has returned $11.3B to investors.

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.

Since it began prorating redemptions in response to a wave of withdrawal requests, primarily from wealthy individuals overseas, Blackstone has stressed the overall performance of BREIT, which the company says has been “exceptionally strong.”

“We built BREIT as an all-weather strategy designed to deliver strong performance across market cycles. BREIT has delivered a 12% annualized net return since inception (January 1, 2017), nearly 3x publicly traded REITs, and outperformed its non-traded REIT peers by 8.2% over the last year,” BREIT’s October 2 letter to shareholders said.

“In August, BREIT delivered its fifth consecutive month of positive performance, generating a 0.9% net return,” the letter noted.

Regarding redemption requests, Blackstone President Jon Gray 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.

“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.