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Blackstone’s (NYSE:BX) BREIT: Why Are Investors Cashing Out?
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Blackstone’s (NYSE:BX) BREIT: Why Are Investors Cashing Out?

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Blackstone’s real estate investment fund is under pressure due to increased withdrawal requests. The redemption requests have exceeded the monthly repurchase limit.

Blackstone’s (NYSE:BX) popular real estate investment fund BREIT (Blackstone Real Estate Income Trust) is under pressure following continued redemptions. While Blackstone didn’t specify any reasons behind such redemption requests in the past several months, rising interest rates and their impact on REITs could be behind the cashouts.

It’s worth highlighting that Blackstone’s BREIT has received redemption requests that exceeded its monthly limit (2% of its net asset value). For February, it received $3.9 billion in withdrawal requests. Meanwhile, it has fulfilled requests worth $1.4 billion. BREIT has a net asset value of approximately $71 billion.

It’s unclear what will happen to investors who have been denied redemption. Further, investors should note that BREIT is not obligated to repurchase any shares or may repurchase some shares based on its discretion.

BREIT has consistently delivered healthy returns to its investors. Highlighting BREIT’s performance, Blackstone’s CEO Steve Schwarzman said during the Q4 conference call that it has delivered net returns of 12.5% annually since inception (about six years ago). Moreover, in 2022, BREIT’s net return was more than 8%, much better than the overall equity and debt markets, which eroded investors’ wealth. 

Further, the company announced in January that the University of California would invest $4 billion in equity into its BREIT Class I shares.

The BREIT’s performance doesn’t reflect investors’ dissatisfaction with the fund. On the contrary, the increase in withdrawals is due to uncertainty in the market. 

While Blackstone’s largest product is under pressure, let’s look at what analysts recommend for the stock. 

Is Blackstone a Buy or Sell?

The increased redemption pressure could remain a short-term drag on Blackstone stock. For now, many analysts are optimistic on the stock: it has received 12 Buy, four Hold, and one Sell recommendations for a Moderate Buy consensus rating. 

Further, analysts’ average price target of 102.93 implies 14.65% upside potential.

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