Wednesday, January 4, 2023

UC Pumps $4 Billion into BREIT

Blackstone's stressed real estate investment trust (BREIT) targeted the individual investor.  Many investors wanted out after publicly traded REITs fell significantly and Blackstone's REIT valuation rose slightly.  

That caused a BREIT run forcing Blackstone to limit withdrawals, which made more investors want out.  Ironically a major investor rode to the rescue.  Bloomberg reported:

"...the University of California will inject the $4 billion into BREIT and Blackstone will backstop the university system’s investment by $1 billion if returns fall short of a goal. If the investment generates more than 11.25% annualized net returns, Blackstone will receive a higher payment from the university system. Blackstone will make money on the deal if returns are at least 8.7%, the company said."  

Weren't the PEU boys supposed to save public pensions and foundations, not be rescued by one?  

Update:  Bisnow reported:

Following in the footsteps of some major nontraded U.S. REITs, BlackRock plans to defer redemptions from its $4.2B BlackRock UK Property Fund for the third quarter of 2022.

Update 1-19-2023:  KKR gated its real estate trust due to higher requests for withdrawals than the allowed 5% per quarter.