Three stocks that look particularly appealing considering their high-dividend yields and beaten-up share prices are Blackstone ( BX 0.30%), UMH Properties ( UMH 0.38%), and Mid-America Apartment . Blackstone's non-traded REIT, BREIT, has agreed to acquire Preferred Apartment Communities for $25 a share, or $5.8 billion. The private equity giant still has a lot of dry powder to continue shopping. If you want full access to our Portfolio and all our current Top Picks, feel free to join us for a 2-week free trial at High Yield Investor. Those sectors are benefiting from long-term tailwinds and inflation. The general trend of NAV prices for all class shares was increasing until a sudden drop occurred in the first quarter of 2020 during the onset of the COVID-19 pandemic. Blackstone Inc on Monday agreed to buy real estate investment trust (REIT) PS Business Parks for $7.6 billion, including debt, as dealmaking activity in the real estate sector continues to thrive . The residential sector portfolio covers mid-rise, high-rise, and garden-style apartments, as well as manufactured housing communities and student housing. (the "Adviser"). "Our business is built on performance, not fund flows, and performance is rock solid," the spokesperson said. Raven Select Service Portfolio, Hyatt Regency Atlanta (GA), JW Marriott San Antonio Hill Resort (TX), etc. I am not receiving compensation for it (other than from Seeking Alpha). Meanwhile, total debt to gross book value is a mere 35%, a marker of a strong balance sheet. The general trend of NAV prices for all class shares was increasing until a sudden drop occurred in the first quarter of 2020 during the onset of the COVID-19 pandemic. This is its first investment outside China. The Motley Fool has a disclosure policy. Since its inception in 2017, BREIT has consistently issued monthly distributions to its stockholders. STAG is a ~$10 billion enterprise value industrial REIT specializing in higher yielding, single-tenant net leased properties largely in secondary and tertiary markets. The average annual cost of a public internally-managed REIT is around 0.6%, and some REITs like Realty Income (O) have it as low as 0.4%. This is to avoid market volatility especially with factors that do not directly relate to real estate. As of FY 2020, BREITs real estate debt investments consist of 194 investments in CMBS, 15 investments in RMBS, 10 corporate bond investments, and 9 real estate loans. Price as of February 28, 2023, 4:00 p.m. . They explain on a conference call earlier this year that: "For the first six months of the year, our real estate strategies appreciated 9% to 10% versus a 20% decline in the REIT index, equaling an outperformance of roughly 3,000 basis points. Liz Brumer-Smith (Blackstone): Blackstone is one of the leading alternative asset-management companies in the world. KentWeakley. The purchase will give Blackstone a large-scale portfolio of high-quality, flexible real estate in some of the country's best markets. Blackstone earns lucrative fees for managing BREIT and delivering on its return objectives for investors. ET, This 4.5%-Yielding Dividend Stock Has $50 Billion to Continue its Real Estate Buying Binge, 1 Roaring Dividend Stock That's Leading the Market Recovery. This button displays the currently selected search type. In July, we saw another example of this accretive capital recycling as STAG sold two properties for $82 million at a 5.2% cap rate after having purchased them several years prior at an average cap rate of 6.2%. Both share classes can be bought through fee-based programs, registered investment advisors, institutional and fiduciary accounts. To be fair, BREIT is a pretty vehicle and it has a strong track record. You can buy or sell with minimal fees with just a few clicks of mouse. NAV REITs do away with daily price fluctuations, making them less volatile compared to traded REITs. 22/06/2021. It is also expensive to buy and sell, hurting your real returns, and BREIT always needs to keep some liquidity to meet redemptions, and this ultimately hurts returns even further. Before that, it struck agreements to acquire three apartment REITs for a combined $13.1 billion, an industrial REIT for $3.1 billion, and a data center REIT for $10 billion. Clearly, as the Vanguard Real Estate Index (VNQ) has sold off along with the broader market this year, Blackstone believes that there is ample value to be found in REITs. As a result, it will receive about $2.7 billion in cash when the deal closes. Blackstone (BX.N) limited withdrawals from its $69 billion unlisted REIT on Thursday after redemption requests hit pre-set limits . BREIT had been a big growth driver for Blackstone. The residential rental market is another. Currently, BREITs presence dominates in the NAV REIT market. 3 Beaten-Down Dividend Stocks to Buy Without Hesitation, My Top 3 Dividend Stocks to Buy Today (and It's Not Even Close), 2 FAANG Stocks Billionaires Are Selling in Droves and 1 They Can't Stop Buying, 3 Stocks That Could Join Apple, Microsoft, and Alphabet in the $1 Trillion Club, 1 Bargain-Basement Warren Buffett Stock Down 78% to Buy Before It Starts Soaring, 2 Growth Stocks That Can Turn $250,000 Into $1 Million by 2030, According to Bloomberg, investors requested to pull more than $5 billion out of, Blackstone created BREIT in 2016 to provide high-net-worth individual investors with access to institutional-quality private real estate investments. Natalie Wong. With 8.1% and 4.3% of the shares outstanding respectively, BlackRock, Inc. and Blackstone Inc. are the second and third largest shareholders. These deals showcase its growing, dominance in the commercial real estate sector, However, even after the recent REIT shopping spree, Blackstone still has plenty of dry powder to continue buying real estate. Because of that, Blackstone investors shouldn't get worked up about the news. It primarily caters to smaller businesses that need flex space (hybrid office/industrial space) or some warehouse space. That has put STAG at a 30% discount to NAV, one of the steepest discounts in its history as a public REIT. They were down a further 2% on Friday morning at $83.45. This means that there is an external asset manager, in this case, Blackstone, that takes care of the management in exchange for fees. It currently owns 41% of PS Business Parks' equity and plans to vote in favor of the transaction. Blackstone claims that its REIT is superior to others. Aside from contributing to the overall returns, real estate debt investments also provide added liquidity especially for cash management in the Companys share repurchase plans. The asset management behemoth boasts roughly $50 billion in dry powder capital earmarked for global real estate, including a new real estate fund with over $24 billion in commitments from investors so far. Matthew DiLallo owns Public Storage. Their corporate headquarters is located at 345 Park Avenue, New York. Is It a Buy Right Now? Credit Suisse analysts wrote in a note that they expected the REIT's woes to weigh on Blackstone's fee-related earnings and assets under management. So far, its highest total net distribution (includes deductions of corresponding fees already) was Class I shares in FY 2019. Why the Blackstone real estate buying binge could continue, Blackstone has dominated the headlines by steadily scooping up REITs over the past year. Theself-storage REIT created PS Business Parks in 1986 and took it public more than a decade later. They earn income by leasing out rental spaces to clients. With the help of BX REIT Advisors LLC, their investment strategy is to invest in stabilized and diverse real estate portfolios to provide income to their investors. Instead, the sell-off in its stock stemming from BREIT looks like a great buying opportunity for long-term investors to add to their position. The deal will add a large-scale portfolio of business park, office, and industrial assets to Blackstone's burgeoning real estate portfolio. Do your own research or seek the advice of a qualified professional. Residential, specifically multi-family homes, bring the most rental revenue to BREITs portfolio, followed by the industrial sector. Cuando se ampla, se proporciona una lista de opciones de bsqueda para que los resultados coincidan con la seleccin actual. That was almost 70% of all the capital raised by non-traded REITs that year. I wrote this article myself, and it expresses my own opinions. New York, June 22, 2021 - Blackstone Real Estate Income Trust, Inc. ("BREIT") announced today that it has entered into a definitive agreement to acquire Home Partners of America ("HPA"), valuing the company at $6.0 billion. The spokesperson added that the REIT relied on a long-term fixed rate debt structure, making it resilient. Total returns could be higher if you account for the accumulated share distributions throughout your investment years. With billions of dollars in dry powder across its real estate private equity funds and cash continuing to pour into its funds, Blackstone will likely continue its real estate shopping spree. PS Business Parks owns a 27 million square foot portfolio of industrial, business park, traditional office, and multifamily properties located primarily in California, Miami, Texas, and . NAV REITs work differently from traditional publicly-traded REITs. To make the world smarter, happier, and richer. I have no business relationship with any company whose stock is mentioned in this article. BREIT has delivered differentiated returns for its investors since its formation. Blackstone has outperformed the market over the past 15 years by 5.0% annually. The continued surge in such requests has kept the pressure on Blackstone's stock price. While commercial real estate itself is performing extraordinarily well this year and retaining its value, publicly traded REITs have shed around 20% of their value and now mostly trade at discounts to NAV. All of these are made possible through sponsorship from the Real Estate Group of The Blackstone Group, Inc. with decades of real estate experience. Please. "People are taking profits at the value Blackstone says their REIT shares are at," said Snyder. Those returns will eventually draw more investors to BREIT. When expanded it provides a list of search options that will switch the search inputs to match the current selection. DISCLAIMER: Jussi Askola is not a Registered Investment Advisor or Financial Planner. "It's not a surprise that you would see a deceleration in flows from individual investors when you've had this kind of market decline," Gray said. For example, Blackstone provides the option to repurchase shares from investors once a month. LONDON (Reuters) -While there has been little wider fallout from this week's surge in redemption requests at an unlisted Blackstone real estate income trust (REIT), it is being read by some as a warning sign. Blackstone has agreed to pay $187.50 per share in cash for PS Business Parks, a roughly 15% premium to its average share price over the last two months. Their recent property acquisitions recorded as of June 2021 were 15 investments 17 residential properties, 28 industrial properties, and 1 office property amounting to $2.1B. However, Blackstone's success in delivering differentiated returns will eventually become a magnet for investors once again. BREIT has 4 types of common shares which differ in how the investors will be charged. Please be aware of the risks associated with these stocks. Public REITs are liquid and naturally, this will result in some volatility, but at least, you are not lying to yourself, thinking that something isn't volatile just because it isn't traded. Matthew DiLallo has positions in Blackstone and has the following options: short June 2023 $60 puts on Blackstone. Blackstone is taking another REIT private. Making the world smarter, happier, and richer. Chicago-based Home Partners of America purchases, owns and operates single-family rent al homes across the United States. Certain parameters from financial statements will tell you how the company managed its investments through the ups and downs of the business cycle. While its recently announced deals will utilize some more of that capital, additional money is likely to continue flowing into its coffers. It owns mainly rental housing and industrial properties. Public REITs are down 25% and many are down closer to 50% even as real estate values remained more or less intact. Associate Director at Atlantic Group. BREITs common stocks are priced at their fair value in terms of NAV net asset value. That suggests it could make more headline-grabbing deals this year. I have no business relationship with any company whose stock is mentioned in this article. However, it recovered by the end of 2020 and soared in the first half of 2021. Asset management giant Blackstone (BX) boasts a portfolio of assets under management reaching nearly $1 trillion, made up largely of real estate. A Blackstone spokesperson declined to comment on how the New York-based firm calculates the valuation of its REIT, but said its portfolio was concentrated in rental housing and logistics in the southern and western United States that have short duration leases and rents outpacing inflation. It leads to "growth at all costs", which hurts returns, and this is why such externally-managed REITs are disliked by investors. This was followed by the Class I shares, Class D shares, and then the Class T shares. There are literally no signs of a slowdown yet for STAG's industrial real estate, and yet the market has punished STAG with a ~35% selloff this year. The REIT also represented a bid to win over high net-worth investors clamoring for private market products, which they believe perform better than those that are publicly traded. Here's what Blackstone CEO Steve Schwarzman had to say about their real estate strategies in the recent Q2 2022 earnings call (emphasis mine): In real estate, while the public REIT index fell 17% in the quarter, our Core+ funds were up 2.3%. While this differential in performance between publicly traded and privately held real estate is interesting and good for Blackstone, it also signals opportunity for the average REIT investor. But it is hard to ignore the huge disparity in valuations between BREIT and Public REITs in today's market. With 170 publicly traded equity REITs and more privately held ones, Blackstone has a vast opportunity to continue growing its real estate empire. For the first half of 2021, the NAV price soared high with Class S shares at the top values at $12.92/share (July 2021). Cap rates have expanded a bit, but so has the property NOI in most cases. Blackstone Inc (BX.N) limited withdrawals from its $69 billion unlisted real estate income trust (REIT) on Thursday after a surge in redemption requests, an unprecedented blow to a franchise that helped it turn into an asset management behemoth. But I think that public REITs are today far more opportunistic than BREIT. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. That's a 39% premium to its stock price on Feb. 9, when news broke that . If I owned BREIT, I would try to get out of it to invest in public REITs instead. Real estate major DLF has no plans to launch public offer of REIT in the next one year to monetise its rent-yielding commercial properties, its CEO Ashok Tyagi said. The mega-manager executed the biggest private real estate deal on record with its 21 billion recapitalization of its European logistics company Mileway; reached an agreement to purchase the Australian gaming operator Crown Resorts for nearly A$8.9 billion ($6. Blackstone managed a total of $236 billion of wealth held by individuals as of the end of September, up 43% year-on-year. Schwarzman took home more than $1.27 . They both have quality management teams with significant skin in the game. Focusing on the common shares, BREIT has a total of 112,104 holders across the 4 types of class shares as of March 17, 2021. Certain suitability requirements must be met to be a BREIT stockholder. Nonetheless, they fueled investor concerns about the future of the REIT, which makes up about 17% of Blackstone's earnings. Este botn muestra el tipo de bsqueda seleccionado. It was bought on a sharp yield of close to 4 per cent. The company has a market cap of $3.67 billion, a P/E ratio of 14.90 and a beta of 1.31. When expanded it provides a list of search options that will switch the search inputs to match the current selection. Cliccando su Accetta tutto accetti che Yahoo e i suoi partner possano trattare i tuoi dati personali e utilizzare tecnologie come i cookie per mostrarti annunci e contenuti personalizzati, per la misurazione degli annunci e dei contenuti, per l'analisi del pubblico e per lo sviluppo dei prodotti. Just because something isn't quoted does not mean that it isn't correlated or volatile. As of June 30, 2021, their total properties were 1,463. The REIT turmoil is a setback for two of Blackstone's strategies that helped it become the world's biggest alternative asset manager with $951 billion in assets: real estate investing and attracting high net-worth individuals. 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