Blackstone To Limit Withdrawals From $125bn Real Estate Fund

Blackstone will limit investor withdrawals from its $125bn real estate investment fund following a spike in redemption requests, according to the New York-based firm, following an announcement that it will sell its stake in two Las Vegas properties.

Only 0.3% of the fund’s net assets will be available for redemption in December, according to a notice sent to investors Thursday, following a surge in requests in November and October.

In October, Blackstone received $1.8 billion in redemption requests—2.7% of the net asset value—and has already received requests in November and December exceeding its quarterly limit, according to the Financial Times.

Only 43% of redemption requests from investors were fulfilled in November, totaling $1.3 billion in assets.

Following the announcement, shares at the company fell by as much as 10%.

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Blackstone will receive $1.27 billion in cash—generating about $730 million for shareholders—from Vici Properties Inc. for its 49.9% stake in the MGM Grand Las Vegas and the Mandalay Bay, two properties valued at $5.5 billion total, according to a release Thursday.

“Our business is built on performance, not fund flows, and performance is rock solid,” a Blackstone spokesperson told the Financial Times, adding the company will continue to focus on rental housing opportunities.

$69 billion. That’s the estimated value of Blackstone’s assets across logistics facilities, apartment buildings, casinos and medical office parks. Forbes estimates the real estate firm totaling $15.5 billion in revenue through 2022.

The Blackstone Real Estate Income Trust rose in the real estate industry with its inception in 2017, according to Bloomberg, as it quickly acquired apartments, suburban homes and dorms during a period of low interest rates.

Investors have become increasingly more cautious about accumulating money in assets that are hard to trade and value while Blackstone continues to place more limits on access to its funding. Because of the two Las Vegas property sales, in addition to the earlier $5.6 billion sale of The Cosmopolitan, the firm now has access to more liquid assets, potentially allowing it to redeem more requests in the near future.

Source: Forbes

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