BREIT Fulfills 29% Of April Withdrawal Requests, Limits Redemptions For Sixth Month Straight

Blackstone Real Estate Investment Trust received $4.5B worth of withdrawal requests for the second consecutive month in April, leading it to restrict redemptions from the $70B nontraded REIT for the sixth month in a row.

The private REIT allowed about $1.3B, or 29% of the requests, to be fulfilled, according to a letter to investors dated Monday. That follows $666M, or 15%, of requests that were redeemed in March. 

The $4.5B worth of repurchase requests in March and April were up from February’s $3.9B worth of requests but down 15% from a peak of $5.3B in January. 

Withdrawal requests for BREIT began outrunning the company's willingness to fulfill them late last year when nervous investors questioned the nontraded REIT's net asset value amid sliding or uncertain real estate valuations.

BREIT allows for repurchases of up to 2% of its net asset value per month or 5% per quarter, "subject to BREIT’s majority independent board of directors’ broad repurchase discretion," it said in its letter. 

The April withdrawals met the 2% limit, it said. The REIT also allowed for 2% of withdrawals in both January and February, further limiting what it could pay out in March.

BREIT has handed back $6.2B to shareholders since November, when withdrawal requests first overtook the amount the REIT was willing to fulfill. 

About 80% of the REIT’s portfolio is made up of rental housing, industrial and data centers, with 70% in Sun Belt markets, the letter says. 

“Just as critical is what we don’t own,” BREIT said in the letter. “We have virtually no exposure to certain challenged sectors such as commodity office, for-sale housing and regional malls, and BREIT has a strong balance sheet with ~90% fixed rate debt for the next 6 plus years.”

Despite the withdrawal requests, 96% of BREIT’s U.S. investors and 93% of investors overall remained invested last month. 

“Looking ahead, we remain confident that BREIT’s portfolio will continue to be well-positioned to deliver strong long-term performance and consistent distributions, while providing investors access to the diversification benefits of high-quality real estate as a core portfolio holding,” the letter says.

Unfulfilled purchase requests aren't carried over automatically from month to month, so it is unclear how many repurchase requests have been made multiple times.