Blackstone REIT Investors May Have Reason to Worry

Investors have sustained serious losses in the $59B Blackstone Real Estate Income Trust (BREIT). Attorneys have been investigating this high-risk product since it began limiting redemption requests in November 2022. BREIT’s 2023 annual report revealed it paid $2.8B in distributions, exceeding its $2.7B cash flows, and faced significant withdrawal requests, resulting in a notable drop in its net asset value (NAV). Analysts question the fund’s appraised value amid declining real estate values post-COVID. MacKenzie Capital’s mini-tender offer to buy Class S shares at 38% below NAV further indicates investor losses. BREIT’s issues were exacerbated by rival Starwood REIT’s liquidity problems and redemption limits. InvestmentNews reports that Blackstone President Gray noted these issues have led more BREIT investors to request withdrawals. REIT fraud lawyers are also investigating losses involving Starwood REIT, which only fulfilled $500M of $1.3B in investor withdrawals in the first quarter of 2024.