As the redemption queue for the Blackstone Real Estate Income Trust (BREIT) hit $4.5 billion in March — 16% lower than peak redemptions in January — investors have been told they will need to resubmit any “unsatisfied portion” of their current repurchase request again at the end of April.
Marking the fifth straight month BREIT has blocked redemptions, one online platform is marketing its buy-side interest in the retail real estate offering.
Investors can buy and sell shares on LODASMarkets.com, according to Brian King, CEO of the online secondaries market. “LODAS offers a path to liquidity with $1 billion of BREIT buy-side interest available on our platform, which is proprietary and registered with the SEC,” said King.
The service LODAS provides is also valuable to the market as a whole, he added, given the fact that overall non-listed REIT fundraising hit a 2 1/2-year low in February, with redemption requests exceeding fundraising by 3.5x, according to Robert A. Stanger & Co.
At the beginning of March, investors were told that BREIT received repurchase requests of $3.9 billion in February and only fulfilled $1.4 billion of those requests or 35% of the shares submitted for repurchase.
Blackstone’s BREIT first limited investor redemptions in late 2022. A $4.5 billion deal with the investment office of the University of California earlier this year was said to give BREIT increased balance sheet flexibility and capital during an opportune deployment period for all investors. Another $2 billion of capital was raised for the $70 billion BREIT in the fourth quarter of 2022.
“The first trade of Class D BREIT shares was executed in the LODAS marketplace at $14.42, which is equal to January’s NAV and just below February’s NAV of $14.47,” said King in late March. “This is big news for investors as BREIT capped redemptions for the fourth straight month in February, redeeming just $1.4 billion despite receiving $3.9 billion in total requests.”
Overland Park, Kan.-based LODAS is also providing liquidity for Starwood REIT with institutional buyers offering liquidity for investors who don’t want to wait another month to test their luck in redemption queues, added King.
The LODAS marketplace, launched in 2021, has nearly $1 billion in total buy-side interest and more than 30 funds being traded. All trades are paperless, potentially executed in a day, and settled in as quickly as five days. It’s significantly faster than the multi-week process that’s been the standard, officials say.
Officials at Blackstone, however, are still confident of BREIT’s performance outlook in their latest letter to shareholders. “We remain confident that BREIT’s portfolio will continue to be well-positioned to deliver strong performance and a consistent tax-advantaged distribution yield, while providing investors access to the diversification benefits of high-quality real estate as a core portfolio holding,” they wrote.
