Blackstone REIT Common Shares Issued Up 46%
December 9, 2021 | James Sprow | Blue Vault
Using the 424b3 filings with the SEC, we can estimate the capital being raised by Blackstone Real Estate Income Trust. For the period October 14, 2021 through November 12, 2021, the REIT has issued 164.3 million shares, compared to 112.3 million shares issued over the previous period of September 15 through October 14. That reflects an increase of 46% from the earlier period.
The REIT also provided a portfolio update in the filing, as well as an updated December 1, 2021, transaction price for the four classes of shares:
Source: Blue Vault
Portfolio Update (from the 424b3 November 12)
For the month ended October 31, 2021, BREIT’s Class I NAV per share increased $0.40, from $13.50 as of September 30, 2021, to $13.90 as of October 31, 2021.1 This price movement reflects broad-based increases in the value of assets, particularly among our residential, industrial and net lease properties.
We have oriented BREIT’s portfolio to markets and sectors where we see opportunities for outsized growth. Today, our portfolio is nearly 80% concentrated in industrial and residential, two of the best performing sectors where growth is outpacing inflation.2 These sectors typically have shorter duration leases which provide the opportunity to regularly adjust rents to the market, resulting in higher cash flows. In addition, increases in the cost to develop make new supply more costly and less financially feasible, generally supporting higher occupancies and stronger pricing power for existing assets. These dynamics are driving increased cash flows across the real estate sectors where BREIT is concentrated:
a. Residential (47% of BREIT’s real estate portfolio): BREIT’s top residential markets are experiencing double digit multifamily rent growth.3
b. Industrial (32% of BREIT’s real estate portfolio): BREIT’s industrial assets are executing leases at 13% higher rents in Q3’21 driven by continued e-commerce growth and disrupted supply chains.4
As a result of BREIT’s thoughtful sector and market selection, we believe BREIT is well-positioned for a rising-rate, inflationary environment.
In addition, we continue to identify differentiated opportunities to acquire high-quality, income-generating assets in growth markets. For example, on October 20, 2021, BREIT completed the acquisition of WPT Industrial Real Estate Investment Trust ((TSX: WIR.U; WIR.UN) (OTCQX: WPTIF) (“WPT”), a Canadian-listed REIT, in an all-cash transaction valued at $3.2 billion including the assumption of debt. As part of this transaction, we acquired nearly 30 million square feet of high-quality industrial assets across the U.S in established industrial submarkets concentrated in Atlanta, Dallas, Indianapolis, L.A, Memphis, and Minneapolis. We believe the industrial sector is benefitting from continued strong demand driven by e-commerce growth and disrupted supply chains. This transaction further orients BREIT’s real estate portfolio toward the industrial sector.
In addition, we currently estimate that 90% – 100% of distributions for the year ended December 31, 2021 will be characterized as return of capital for federal income tax purposes.
Source: SEC
