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Blackstone’s massive real estate fund is limiting withdrawals after a breach of its quarterly repurchase limit.
Blackstone Real Estate Income Trust is tightening redemption requests for the remainder of the quarter, Bloomberg reported.
The REIT is already warning that repurchase requests could be limited or suspended in the first quarter.
Blackstone Real Estate Income Trust (Breit) said requests exceeded the 2% of the net asset value (NAV) monthly limit and 5% of the quarterly threshold. Blackstone shares fell 9.6% to $82.76 in New York.
“If Breit receives elevated repurchase requests in the first quarter of 2023, Breit intends to fulfil repurchases at the 2% of NAV monthly limit, subject to the 5% of NAV quarterly limit,” Breit said in a letter Thursday.
Blackstone’s real estate fund, which has snapped up apartments, suburban homes and dorms in recent years, has come under pressure as interest rates rise and investor appetite cools. Breit cautioned that it could limit or suspend repurchase requests going forward.
A major chunk of redemptions has come out of Asia this year, said a person familiar with the matter who asked not to be identified citing private information.
“The Breit outflow bear case is playing out, impacting shares this morning, and we expect it to remain an overhang on shares in the coming quarters,” Michael Brown, an analyst at Keefe Bruyette & Woods, said in a note to investors Thursday.
“Growth of the retail channel has been a key driver of BX’s success in recent years and the growth challenges facing the company on the retail side could continue to weigh on BX’s valuation.”