Blackstone $69 Billion REIT Curbs Redemptions in Blow to Franchise

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NEW YORK (Reuters) -Blackstone Inc limited withdrawals from its $69 billion real estate income trust (REIT) on Thursday after receiving too many redemption requests, an unprecedented blow to a franchise that helped it turn into an asset management behemoth.

Investors in the REIT, which is not publicly traded, have been growing concerned that Blackstone has been slow to adjust the vehicle’s valuation to that of publicly-traded REITs, which have taken a hit amid rising interest rates, a source close to the fund said.

The uptick in redemptions, however, has been driven by Asia-based investors needing liquidity in light of the volatility in that region’s markets, the source added, requesting anonymity because the matter is confidential.

A Blackstone spokesperson said the REIT’s portfolio was concentrated in rental housing and logistics and relied on a long-term fixed rate debt structure, making it resilient.

“Our business is built on performance, not fund flows, and performance is rock solid,” the spokesperson said.

Blackstone said it would curb withdrawals from its REIT franchise after it received in November redemption requests greater than 2% of its monthly net asset value and 5% of its quarterly net asset value.

Blackstone shares ended trading on Thursday down 7.1% at $85.04 on the news.

(Reporting by Chibuike Oguh in New York, Editing by Rosalba O’Brien)

Copyright 2022 Thomson Reuters.

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