BREIT Investor Losses Investigated by Bakhtiari & Harrison

Bakhtiari & Harrison is investigating potential claims on behalf of investors who purchased BREIT through their financial advisor or brokerage firm. If you are an investor that lost more than $100,000 in BREIT you should consider all legal options. If you wish to discuss your particular situation and the potential for the recovery of your investment losses, or you have information of interest, please contact us for an evaluation of your potential case.

Investors, particularly retirees, often seek out investment opportunities that promise safety and capital preservation. Real Estate Investment Trusts (REITs) have long been marketed as reliable vehicles for achieving these goals. However, recent developments have raised significant concerns, particularly regarding the performance of the Blackstone Real Estate Income Trust (BREIT). In this piece, we will explore the timeline of BREIT’s performance, the Financial Industry Regulatory Authority (FINRA) notices on alternative investments, and what this means for investors who were promised stability and security.

The Appeal of BREIT REIT

BREIT REIT, launched by Blackstone, was initially presented as a stable investment option with the potential for steady income and capital preservation. Its appeal was especially strong among retirees looking for low-risk investment opportunities. The marketing materials highlighted BREIT’s diversified real estate portfolio, professional management, and the potential for consistent returns.

Timeline of BREIT’s Performance

Despite its initial promise, BREIT has faced several challenges that have impacted its performance:

• 2017-2019: Initial GrowthDuring its early years, BREIT enjoyed a period of growth. Investors were drawn by its attractive yield and the perceived stability of real estate assets. The fund expanded its portfolio, acquiring various commercial and residential properties.
• 2020: The Pandemic ImpactThe COVID-19 pandemic brought unprecedented challenges to the real estate market. Many commercial properties saw reduced occupancy rates and declining rental income. BREIT was not immune to these challenges, and its performance began to waver. Despite reassurances from Blackstone, concerns about the fund’s ability to maintain its promised returns grew among investors.
• 2021-2022: Market VolatilityAs the economy started to recover, the real estate market faced further volatility. Rising interest rates and changing market dynamics affected property valuations and rental incomes. BREIT’s performance during this period continued to fluctuate, raising red flags for investors who were assured of its stability.
• 2023: Declining ReturnsBy 2023, it became evident that BREIT was struggling to deliver the returns promised to investors. The fund’s net asset value (NAV) declined, and distributions were reduced. Investors who had been led to believe that their capital was safe and would grow steadily were left with significant concerns.

FINRA Notices on Alternative Investments

The Financial Industry Regulatory Authority (FINRA) has issued several notices and guidelines concerning alternative investments like REITs. These notices aim to protect investors by ensuring that they are fully informed about the risks associated with such investments.

• NTM 03-71: Due DiligenceFINRA’s Notice to Members (NTM) 03-71 emphasizes the importance of due diligence when recommending alternative investments. It requires firms to thoroughly investigate the investment’s potential risks and returns and to disclose these findings to investors.
• NTM 10-22: SuitabilityNTM 10-22 focuses on the suitability of recommendations. It mandates that financial advisors must ensure that any investment recommended to clients aligns with their financial situation, risk tolerance, and investment objectives. This notice is particularly relevant for retirees who typically seek low-risk investments.

What This Means for Investors

For investors, especially retirees, who were told that BREIT was a safe investment with guaranteed capital preservation, the fund’s poor performance has been a harsh lesson. The decline in NAV and reduced distributions have left many feeling misled and financially vulnerable.

Protecting Your Investments

If you are an investor who was misled about the safety of your investment in BREIT, you have options. At Bakhtiari & Harrison, we specialize in helping investors who have been wronged by their financial advisors. Our expertise includes:

• Thorough InvestigationWe conduct a detailed investigation into the circumstances of your investment, examining whether proper due diligence was performed and whether the investment was suitable for your financial situation.
• Legal RepresentationWe represent investors in disputes with financial advisors and firms, seeking compensation for losses incurred due to misleading investment recommendations.
• Elder Abuse ProtectionFor senior investors, we leverage elder abuse statutes to provide additional protections and seek damages for any fraudulent or misleading practices that have harmed their financial well-being.

Conclusion

The poor performance of BREIT REIT serves as a stark reminder of the importance of due diligence and suitability in investment recommendations. If you have been adversely affected by your investment in BREIT, contact Bakhtiari & Harrison today. Our team is dedicated to protecting your interests and ensuring that you receive the justice you deserve.