Skip to main content

Blackstone Blocked BREIT Investor Withdrawals

Blackstone Inc recently announced it has blocked investors from cashing out their investments in its $71 billion real estate income trust (BREIT) as the firm struggles with a surge in redemption requests. In February, BREIT fulfilled $1.4 billion in redemption requests, covering only 35% of the approximately $3.9 billion total requests for the month, according to a letter sent to investors.

The total redemption requests in February saw a 26% decline from the $5.3 billion requested in January. Despite this decrease, Credit Suisse analysts, led by Bill Katz, noted that gross redemptions for February align with prior management commentary, reflecting a broader trend of decelerating growth in retail-oriented products.

Credit Suisse downgraded Blackstone’s stock to underperform in November, citing the rise in investor redemptions from BREIT. Blackstone’s shares dropped 0.25% to $90.57 per share on Wednesday, adding to last year’s 43% decline in stock value.

Since November, Blackstone has exercised its right to block investor withdrawals after requests surpassed a preset 5% net asset value of BREIT, which is primarily marketed to high net worth individuals. Blackstone President Jonathan Gray mentioned in an earnings call last month that the firm anticipates ongoing redemption requests as some investors make larger withdrawals in anticipation of a reduction in BREIT’s size. However, Gray expressed confidence that the firm would eventually clear the backlog of unfulfilled requests.