Are REITs Doomed? Blackstone’s REIT Fallout

Over the past week there’s been a lot of discussion about Blackstone’s real estate investment trust, called BREIT. And I’ve been hearing a lot of talk going around about what this means for REITs and the real estate market as a whole. Shares of Blackstone’s stock has fallen over reports that there’s been a rush of investors trying to pull money out of their REIT. And some people have been claiming this is gonna trigger a mass exodus out of REITs and cause a collapse in the real estate market. So today I wanted to talk about this situation and point out a few things that I think some people might not be aware of in regards to this situation.

BREIT is Blackstone’s private REIT that was founded in 2016 that invests primarily in stabilized income-generating commercial real estate investments across asset classes in the United States. They also invest to a lesser extent, real estate debt investments with a focus on current income. BREIT currently has a net asset value of $69 billion dollars according to their website they focus primarily on investing in the southern and western parts of the United States with the majority of their properties being in the rental housing and industrial sectors.

#dividendinvesting #dividends #dividendstocks

[Iawait]

dividend bull sends a vid I watch. Simple man I am

[lonnieporter]

Fearmongering is the most practiced exercise on The Net.

[askjussi]

Why would you pay a premium to invest $BREIT, which is an illiquid, externally-managed REIT that lacks specialization and has high management cost... when you could buy $REITs like $CPT and $EGP that are liquid, internally-managed, and specialized at a large discount to NAV?

[Steverino]

Excellent analyses. I think most shareholders got in to this fund when REITS(both private and public) were valued as a class about 20% higher than they are today. This is a play to sell private REITS at a higher assessed level and reinvest at much lower public REIT level. This is why they limit withdrawals to 10%. They should hold the investors to the rules. I am a share holder in Blackstone common shares.

[ignorethis]

My TWO and NLY have tanked over the last two years... good thing I didn't put too much into them, but I thought they were safer than they really were.

[baarbacoa]

I'm in a couple of small private REITs. Basically I'm a limited partner in a business. Like any business, it doesn't work if folks can just cash out and run.

[shaneomack]

When Allan said “hot trash” I about fell out of my chair hah

[redhatkat]

One important piece of information you're missing about BREIT is that if redemptions equal either 2% of NAV on a monthly basis or 5% of NAV on a quarterly basis, the fund reserves the right to gate redemptions exactly for the purpose of not having to enter into forced liquidations. Given that, it's very unlikely they'll ever be forced into that situation. They have, in fact, triggered those gates, so yeah, it sucks if you need liquidity, but the fund won't be forced into liquidations.

[pierrechapgier]

All residential Reits are down 20 to 30% this year. But Blackstone BREIT is supposed to be up 12%. How Come ? It's just that they (Blackstone) are the one saying what the value of their share is. Sure, they are saying it's based on appraisals... MAI appraisals (made as Instructed). Be cautious. If this is challenged, there will be a rush to the exits...

[bedangtv]

thank you for the insight. needed this information ! 👍

[jamesmcc]

I'd like to see your portfolio. It would be interesting to see

[dylancunningham]

A lot of people don't understand the REIT business model. Even for public REITS falling share price is terrible, as they can't issue new units to continue to expand, adding on an interest rate increase profit margins of these investments have been squeezed. Many REITs I have researched are unable to keep up with current distributions and are falling behind in the current environment.

[crickett]

Blackstone Private Reit possible has accounting irregularities and that is the reason for the withdrawals. Financial Advisors are trying to take out funds. All reits are down 30 to 40% and Blackstone is up by 5%. Madoff affect and people are worried

[lehtamohan]

The number of bots spam marketing in this comment section is unbelievable. Something needs to be done.

[arigutman]

We will be living in a higher inflationary environment for at least six months to a year out so REITs are ideal places to park money with higher dividend yields. I think it ultimately comes down to safe REITs to invest into and aim for quality in that matter...

[TJR]

Good video! No worries. REITs forever 📈🙏

[Gary]

Looks like a little spillover is going on as the SEC looks into BX and STWD for limiting investor withdrawals. The 15 yr high flying BX is down 46% from it's 52 wk high.
Wallstreet and Fed is wondering what will crack during this tightening process. Starting to get a hint with Reits especially the leveraged ones straining.

[markivrimusic]

Generally what happens is always a combination of a trigger event that another event within the market and and create a chain reaction of fear

[nadruik]

I'm pretty sure the crypto centralized exchanges each said that when they froze withdrawals it wouldnt scare people enough to keep trying to withdraw and collapse them into bankruptcy also. But the act of freezing someones funds creates understandable fear, and nobody wants to be the one left holding the bag when the music stops. We will have to see though, the cap will mean they will either race to withdraw when January starts or they will calm down and blackstone will be fine. I mean what would you do if your bank told you no more this month even if you wanted just another $100? I know the next month I'd be in there pulling the max again just in case it was collapsing.

[AndrewInvest]

They won't do a fire sale. They are backed by smart money and have plenty of liquidity.