BREIT Receives $1.1B In December Repurchase Requests, Down 41%

Nontraded REITs, once a darling among investors, lost much of their allure during 2023, raising $9.8B last year through November compared with $33.2B in 2022, The Wall Street Journal reports, citing Robert A. Stanger & Co. data.

At the same time, investors cashed out to the tune of about $17.4B through November, topping $12B in redemptions in all of 2022, according to Stanger.

Not every investor seeking to cash out has received payment, as nontraded REITs limited redemptions starting in late 2022 while demand for redemptions increased. Those limits remained in place throughout 2023.

In December, Blackstone Real Estate Income Trust, the largest nontraded REIT, received $1.1B in redemption requests, down 41% from November and 80% from the peak in January 2023, the company said. BREIT paid out $569M of those requests.

“We were pleased to see December repurchase requests continue the monthly decline to be 80% lower than the January 2023 peak,” a BREIT spokesperson told Bisnow by email on Tuesday, adding that December was the lowest month of repurchase requests and the first month repurchase requests fell below the 2% monthly limit since September 2022.  

"We have returned $14.3B of liquidity to investors since November 30, 2022, when proration began while maintaining resilient performance,” Blackstone said in a statement on Tuesday. “Shareholders who began submitting repurchase requests just two months ago have already received nearly all of their money back.”

In its statement, BREIT also noted that interest rates have declined from their October 2023 peak which should represent a long-term positive for real estate values.

“At the same time, a higher cost of capital has driven a meaningful decline in new construction which should lead to better fundamentals in the medium term. New warehouse construction starts are down nearly 80% while apartment construction starts are down about 30%.”