BREIT is a non-listed real estate investment trust that focuses on current income and invests largely in stabilized income-generating commercial real estate investments across asset classes in the United States, as well as real estate debt investments to a lesser extent. We may invest in Canada and Europe, as well as abroad, to a lesser extent. This investment entails a substantial amount of risk. You should only buy these assets if you can afford to lose your entire investment. A discussion of the risks associated with an investment in BREIT can be found in the prospectus. The following are only a few of the potential dangers:
- Because our common stock does not trade on a public exchange, repurchasing your shares from us will most likely be your sole option. We are not required to repurchase any shares under our share repurchase plan, and we may choose to repurchase only part or none of the shares that have been requested. Repurchases will also be limited by available liquidity and other substantial constraints. Our board of directors also has the authority to make exceptions, amend, or suspend our share repurchase programme. As a result, our stock should be regarded as having restricted liquidity, and may even be illiquid at times.
- We cannot guarantee that we will make distributions, and if we do, we may fund them from sources other than cash flow from operations, such as the sale of or repayments under our assets, borrowings, or offering proceeds, with no limits on the amounts we may pay.
- Our common stock purchase and repurchase prices are normally based on our prior month’s net asset value (“NAV”), rather than any public trading market. While independent annual evaluations of our properties will be conducted, property appraisals are inherently subjective, and our NAV may not correctly reflect the actual price at which our properties could be sold on any given day. If you calculate the NAV per share as of the date you make your subscription or repurchase request, the transaction price you pay or the repurchase price you receive may be significantly different. Certain of our investments or liabilities are subject to high levels of volatility from time to time and may change significantly in value between the end of the previous month, when our NAV is calculated, and the date on which you acquire or repurchase our shares; however, the prior month’s NAV per share will generally continue to be used as the offering price per share and repurchase price per share.
- BX REIT Advisors L.L.C. (the “Adviser”) is responsible for our operations. Because of, among other things, the allocation of investment opportunities among us and Other Blackstone Accounts (as defined in BREIT’s prospectus), the allocation of time of its investment professionals, and the substantial fees that we will pay to the Adviser, the Adviser will face conflicts of interest.
- When you buy shares, the net tangible book value of your investment will be diluted right away.
- If we fail to meet the requirements to be classified as a REIT and no relief measures apply, our NAV and cash available for distribution to stockholders may be considerably reduced.
- We do not own the Blackstone name, but an affiliate of Blackstone Inc. (along with its affiliates, “Blackstone”) has granted us permission to use it as part of our corporate name under a trademark license agreement. Our business could be harmed if other parties use the name or if our trademark license arrangement is terminated.
Certain countries have been vulnerable to infections that have been classified as pandemics by international health authorities, the most recent of which being COVID-19. The spread of such epidemics, as well as any travel restrictions or quarantines imposed as a result, has had and may continue to have a negative impact on the global economy and business activity (including in countries where BREIT invests), potentially affecting the performance of BREIT’s investments. Furthermore, the rapid evolution of epidemics may make it impossible to forecast their final negative impact on economic and market conditions, posing material uncertainty and risk to BREIT and the performance of its investments. Please see the COVID-19 Impact on BREIT page for more information “Risk Factors—According to BREIT’s prospectus, “the current outbreak of the novel coronavirus, or COVID-19, has caused severe disruptions in the U.S. and global economies, and has had a negative impact on our performance and results of operations.”
Unless otherwise stated, all financial data is approximate and as of September 30, 2021. “We,” “us,” and “our” are all words that can be used to describe a group of people “Unless the context indicates otherwise, “our” refers to BREIT and its consolidated subsidiaries, including BREIT Operating Partnership L.P.
Does Blackstone have a REIT?
The Blackstone Group (NYSE: BX) is a global private real estate juggernaut. Blackstone Real Estate, the real estate branch of the private equity behemoth, is one of the largest real estate owners, buyers, sellers, and financiers.
Across various real estate investment funds, Blackstone Real Estate manages more than $200 billion in investor cash. The Blackstone Real Estate Income Trust, or BREIT, is a non-traded real estate investment trust that is one of those funds (REIT). In 2017, Blackstone launched BREIT to provide income-oriented investors with access to the Blackstone real estate platform. Its goal was to reinvent the non-traded REIT business model by aligning fees with those paid by institutional investors.
Can individuals invest in Blackstone?
Blackstone is a private equity and alternative investment organization based in the United States that specializes in private equity, credit, and hedge funds. Individual investors are becoming a larger part of the Blackstone Group’s clients, with the corporation focusing on wealthy individuals in a mostly unexplored sector. Low interest rates and higher yields entice individual investors.
Other investment firms followed Blackstone’s lead in opening up this industry. While this shift in methods has been beneficial since the financial crisis, it is unclear whether it will endure during the bull market.
How much do you need to invest in Blackstone?
Some Blackstone fund classes may be accessible to even the most affluent. According to the fund’s website, eligible investors must have a net worth of at least $250,000 or a gross yearly income of at least $70,000 and a net value of at least $70,000. According to the prospectus, the minimum first investment in the Blackstone fund’s common shares is $2,500.
“We see the investment opportunity and feel there is investor demand,” said Joan Solotar, Blackstone’s global head of private wealth solutions, adding that the current environment “makes it difficult for a standard fixed income portfolio to generate the appropriate yield.”
Can individuals invest in REITs?
Investors can diversify their portfolio by investing in both mortgage REITs and equity REITs using this choice. As a result, both rent and interest are sources of income for this type of REIT.
These trusts are similar to private placements in that they only accept a limited number of investors. Private REITs are often not traded on stock exchanges and are not registered with the SEBI.
Typically, public real estate investment trusts issue shares that are listed on the National Securities Exchange and regulated by SEBI. The NSE allows individual investors to sell and buy such shares.
These are SEBI-registered REITs that are not publicly traded. They are not, however, listed on the National Stock Exchange. These options are also less liquid as compared to publicly traded non-traded REITs. They’re also more stable because they’re not affected by market movements.
Advantages of REITs
- Consistent dividend income and capital appreciation: REITs are supposed to deliver significant dividend income as well as stable capital appreciation over time.
- Diversification opportunity: Because most REITS are exchanged frequently on stock exchanges, investors can diversify their real estate holdings.
- REITs are obliged to file financial reports that have been audited by specialists, as they are regulated by the SEBI. It allows investors to obtain information on topics such as taxation, ownership, and zoning, making the entire process more open.
- Liquidity: Because most REITs trade on public stock markets, they are simple to purchase and sell, enhancing their liquidity.
- Obtains risk-adjusted returns: Investing in REITs provides individuals with risk-adjusted returns while also assisting in the generation of consistent cash flow. It allows people to have a consistent stream of income to rely on, even when inflation is strong.
Limitations of REITs
- No tax advantages: REITs offer little in the way of tax advantages. Dividends received from REIT firms, for example, are subject to taxation.
- Concerns associated with market fluctuations: One of the most significant risks associated with REITs is that they are sensitive to market-related swings. This is why investors with a low risk appetite should consider the investment’s ability to generate returns before making a decision.
- Poor potential for capital appreciation: REITs have a low potential for capital appreciation. It’s partly because they give back up to 90% of their profits to their investors and only reinvest the remaining 10% in their business.
Who owns Blackstone REIT?
Larry Fink, Robert S. Kapito, Susan Wagner, Barbara Novick, Ben Golub, Hugh Frater, Ralph Schlosstein, and Keith Anderson launched BlackRock in 1988 to provide institutional clients with risk management asset management services. Fink, Kapito, Golub, and Novick had previously worked together at First Boston, where Fink and his team were pioneers in the United States’ mortgage-backed securities market. As CEO of First Boston, Fink lost $100 million during his tenure. That event inspired him and his colleagues to adopt what they regarded to be superior risk management and fiduciary standards. Fink initially sought money (for initial operating capital) from The Blackstone Group’s Pete Peterson, who believed in Fink’s notion of a risk management organization. It was dubbed Blackstone Financial Management by Peterson. Initially, Blackstone provided Fink and his colleagues with a $5 million credit line in exchange for a 50% share in the bond firm. The company became profitable within months, and by 1989, the group’s assets had doubled to $2.7 billion. In comparison to Fink’s personnel, Blackstone’s share of the company has dropped to 40%.
By 1992, Blackstone owned nearly a third of the corporation, and Schwarzman and Fink were exploring selling stock to the general public. In 1992, the company changed its name to BlackRock, and by the end of the year, it had $17 billion in assets under management. BlackRock had $53 billion in assets under management by the end of 1994. Stephen A. Schwarzman and Larry Fink of Blackstone Group had an internal feud in 1994 over salary and equity procedures. Unlike Schwarzman, who did not want to reduce Blackstone’s shareholding any further, Fink sought to share equity with new workers in order to attract talent from banks. They parted ways, and Schwartzman sold Blackstone, which he later described as a “heroic mistake.” In June 1994, Blackstone sold a $23 billion mortgage-securities unit to PNC Bank Corp. for $240 million. The firm traded mortgages and other fixed-income instruments, and it changed its name from Blackstone Financial Management to BlackRock Financial Management during the sale process. Fink went on to become chairman and CEO of BlackRock Inc., while Schwarzman stayed at Blackstone.
Is BlackRock and Blackstone related?
EQ Office, Hilton Worldwide, Trizec Properties, Center Parcs UK, La Quinta Inns & Suites, Motel 6, Wyndham Worldwide, Southern Cross Healthcare, and Vicinity Centres are among Blackstone’s noteworthy real estate assets.
Southern Cross’ purchase and subsequent IPO sparked debate in the United Kingdom. Part of the deal included dividing the company into two parts: a real estate company, NHP, and a nursing home company, which Blackstone stated would become “the dominant company in the aged care industry.” Southern Cross, now independent, was on the verge of going bankrupt in May 2011, putting 31,000 elderly residents in 750 care homes at jeopardy. Although Blackstone was widely criticized in the media of selling on the company with an unsustainable business model and a crippling sale and leaseback strategy, it denied responsibility.
Following the subprime mortgage crisis in the United States from 2007 to 2010, Blackstone Group LP purchased more than $5.5 billion in single-family houses to rent out and then sell when values rise.
What company owns Blackstone?
THE TWO MOST PROFITABLE WALL STREET ENTREPRENEURS OF THE LAST TWO DECADES WORK ON OPPOSITE SIDE OF PARK AVENUE. Larry Fink, 65, is a Democrat who controls BlackRock from 52nd Street and has his hand stuck to a Starbucks cup. Stephen Schwarzman, 70, is a Republican who controls Blackstone from 51st to 52nd Streets and likes striped shirts with plain collars. Although they are ex-colleagues, their ideas on investment and management are diametrically opposed. Their paths show how the financial world is changing. Mr Fink, who was once the underdog, has risen to the top.
BlackRock, his company, is the world’s largest asset manager, with $6 trillion in assets under management. It is booming and stands for computer power, low fees, and scale. With $387 billion in assets, Mr. Schwarzman’s business, Blackstone, is the largest “alternative” manager focusing on private equity and real estate. It represents a tried-and-true combination of brainpower, high fees, and specialization. It’s been treading water lately.
Customer Segments
Blackstone works with a diverse set of clients from various demographics and industries. These are some of the clients:
- Individual Clients, mostly high-net-worth people, to whom it provides asset management services;
- Clients in the business and commercial sectors, for whom it provides fund management, advisory, and restructuring services; and
- It provides fund and asset management, as well as advisory services, to public and government clients.
Blackstone is said to give services to a variety of high-profile companies, including Microsoft, Comcast, Procter & Gamble, Sony, and Verizon, as well as restructuring services to Xerox and General Motors.
Blackstone invests globally to serve clients in the Americas, Asia Pacific, Europe, the Middle East, and Africa.
Value Propositions
- Its repute and stature, as an established industry leader and a chosen partner for a number of high-profile business and government organisations;
- Its technical competence and experience, with the Company employing highly-trained professional staff throughout its four operating segments, all of whom have extensive experience dealing with a wide range of asset classes and industries;
- Its global reach, with the Company providing management and consultancy services to clients in the Americas, Europe, Asia, the Middle East, and Africa; and
- Its track record of generating solid risk-adjusted returns for its customers across a broad and expanding variety of asset classes and through all types of economic scenarios.
Channels
The Company’s investment management professionals engage directly with customers through teams organized by region, business segment, and asset class, and Blackstone provides its services to clients directly. Through its network of offices in New York, Beijing, Dubai, Dublin, Düsseldorf, Hong Kong, Houston, London, Los Angeles, Madrid, Montecito, Mexico City, Mumbai, Paris, Sao Paulo, Seoul, Shanghai, Singapore, Sydney, Tokyo, and Toronto, the Company aims to service its clients locally, often in person.
Customer Relationships
Through its BXAccess platform, Blackstone provides several tools and capabilities to its clients on a self-service basis. Customers can monitor and assess their current holdings, as well as track various funds and assets, without having to communicate with employees of the Blackstone investment team, using this channel.
The majority of Blackstone’s business, on the other hand, is conducted through direct client interactions. The Company communicates with its customers over time in order to gain a better understanding of each client’s unique needs, constraints, and risk aversion. In order to achieve long-term recurring business, the Company tries to create collaborative partnerships with its clients.
Clients are generally assigned their own team of investment professionals, and Blackstone provides continuing support to them. The Company’s support personnel, who can be reached by phone or email, can also provide more general assistance to potential and existing customers. Clients can also sign up for an email alert service, which alerts them when the company issues press releases or publishes market commentary.
Additionally, through its blog and videos maintained on its website, Blackstone is able to keep its consumers up to date on business and industry changes. The company also has social media accounts on Facebook, LinkedIn, Instagram, and Twitter, where it may communicate with customers directly.
Key Activities
Blackstone is an alternative asset management organization based in the United States. Investment vehicles focused on private equity, real estate, hedge fund solutions, non-investment grade credit, secondary funds, and other multi-asset class strategies are among the Company’s alternative asset management companies.
Private Equity, which manages global, European, and Asian focused opportunistic real estate funds, real estate debt investment funds, and core and real estate investments; Real Estate, which manages global, European, and Asian focused opportunistic real estate funds, real estate debt investment funds, and core and real estate investments; and Hedge Fund Solutions, which includes the activities of Blackstone Alternative Asset Management.
Key Partners
In order to provide its numerous services, Blackstone works with a variety of firms and organizations. The Company raises capital and investment commitments using a partnership structure, in which limited partners, or individual investors or funds, commit their own cash to investment vehicles.
When the corporation has to fund a long-term investment, commitments are taken down. While these partners are critical to the Company’s operations, they have no involvement or influence over Blackstone’s investment funds.
- Service Partners, which are organizations that provide the Company with a variety of outsourced services, such as non-technical administrative and management work; and
- Strategic & Alliance Partners are a group of firms with whom the Company engages on joint venture projects and exchanges tools and resources.
Key Resources
The money and financial resources of Blackstone, as well as its technology and communications infrastructure, network of regional offices, partnerships, and staff, are its most valuable assets.
The Company maintains a network of leased offices throughout the Americas, Europe, Asia Pacific, the Middle East, and Africa, allowing it to operate on a local level, and employs a sophisticated communications and technology infrastructure to ensure that its financial transactions are completed quickly and efficiently.
Cost Structure
The operation and maintenance of Blackstone’s IT and communications infrastructure, the operation of its physical network of offices, the management of its partnerships, the management of its funds, and the retention of its staff all cost money.
Blackstone’s highest expense in 2015 was salary and benefits, which totaled $2.29 billion and included the payment of salaries to its 2,060 employees. Interest expenditure of $144.52 million and fund expenses of $75.00 billion were also accrued by the company.
Revenue Streams
Blackstone makes money through offering a variety of asset and investment management services. This comprises revenue from management and advisory fees, performance fees, investment income, interest, and dividends.
Blackstone earned $4.65 billion in income in 2015, a considerable decrease from the $7.48 billion it earned in 2014. Management and advisory fees, which amounted for $2.54 billion in revenue in 2015, account for more than half of the Company’s revenue. Following that, $1.80 billion in performance fees were collected, with investment and interest income totaling $204.64 million and $102.74 million, respectively.
Who can invest in Blackstone?
Investors should keep in mind that the company’s reliance on performance-based compensation can make earnings more volatile. Although fixed-rate revenue items such as management fees might help to stabilize earnings, performance fees can accentuate year-to-year gains or losses. Blackstone’s performance fees ranged from $1.7 billion to $4.3 billion between 2013 and 2020.
Blackstone, on the other hand, has certain positive aspects that support its long-term growth story. Since 2013, its AUM has increased at a compounded annual rate of 16 percent, while management and advisory fees, a more steady source of revenue, have grown at an annual pace of 11 percent. Although investors should be cognizant of potential earnings volatility, Blackstone has demonstrated that by appealing to clients seeking alternative investments, it can boost its more reliable revenue sources. This, together with its 2% yield, makes it a worthwhile dividend investment to purchase.
Is Blackstone a good investment?
15 of the top 25 private equity firms by cash holdings are situated in the United States, led by Blackstone Group Inc., which has $43.2 billion in cash.
How much cash does Blackstone have?
A REIT is a security that invests directly in real estate and/or mortgages, comparable to a mutual fund. Mortgage REITs engage in portfolios of mortgages or mortgage-backed securities, whereas equity REITs invest mostly in commercial assets such as shopping malls, hotel hotels, and office buildings (MBSs). A hybrid REIT is a fund that invests in both. REIT shares are easy to buy and sell because they are traded on the open market.
All REITs have one thing in common: they pay dividends made up of rental income and capital gains. REITs must pay out at least 90% of their net earnings as dividends to shareholders in order to qualify as securities. REITs are given special tax treatment as a result of this; unlike a traditional business, they do not pay corporate taxes on the earnings they distribute. Regardless of whether the share price rises or falls, REITs must maintain a 90 percent payment.
