BREIT Waives Withdrawal Limit

Blackstone's $57 billion real estate trust, allowing investors to pull all the cash they asked for even after redemptions breached a key threshold. Bloomberg's John Gittelson reported on this from Los Angeles, joins us now. And this is interesting. It's not really the first time they made a decision like this. But in some ways, this time it was a bigger decision, wasn't it? Well, on a percentage basis, it was a bigger decision. Blackstone's BE REIT. Generally limits withdrawals to 2% a month or 5% total per quarter. June being the third month of the quarter, they had sort of less latitude and investors requested to pull about $800 million or 1.4% of the fund, which is over the actual amount that they were allowed for the whole quarter. So they said, well, it's not that much more, let's let them have it because. They want to essentially appease investors and and not send panic that people won't be able to get their money when they want it. And they see the demand for withdrawals kind of declining after a big uptick last month. On one hand, John looking at redemptions doesn't feel great, but on the other hand, the fact that they're able to meet them is a sign of confidence, apparently. Blackstone said redemption requests are 85% below their January 2020, 2020, 23 peak. And 50% lower than May, so redemption seemed to be cooling. How do you describe the state of the issue right now? There was a big uptick at the beginning of 2023 when interest rates went up and people were afraid they couldn't get their money out. And that was the first time Blackstone actually restricted withdrawals. So people were like, we got to get out of here. In May, another fund run by Starwood said they were limiting. All withdrawals 2.33% a month. So people were like we got to get out of Blackstone too. So basically. They overcame the panic and and now things are sort of readjusting to normal.