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BREIT Tax Highlights

BREIT delivers compelling after-tax distributions, supported by a high return of capital (“ROC”) percentage that can reduce investors’ effective tax rates.

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Compelling Distributions and Tax Advantages
Compelling Distributions and Tax Advantages

BREIT has a history of strong consistent monthly distributions. [ 1 ] In 2024, Class I shares delivered a pre-tax annualized distribution rate of 4.8% [ 2 ] with minimal tax dilution, resulting in an after-tax distribution rate of 4.7% [ 3 ] – equivalent to a 7.5% tax-equivalent distribution rate for investors in the highest federal tax bracket. [ 3 ][ 4 ][ 5 ][ 6 ]

  • 96% of BREIT’s distribution in 2024 was treated as return of capital (“ROC”) primarily due to depreciation [ 7 ][ 8 ]

  • ROC distributions result in minimal tax dilution through deferral, reducing ordinary income tax [ 5 ][ 7 ]

  • If all BREIT distributions were taxable as ordinary income, investors would need to find an investment that generates a pre-tax distribution rate of 7.5% to match the 4.7% after-tax distribution rate generated by BREIT Class I shares [ 3 ][ 6 ]

BREIT’s December 2024 Annualized Distribution Rate [ 3 ][ 6 ]
Based on 96% ROC [ 7 ][ 8 ]

BREIT Tax Features: Class I Distribution Rate, 4.8% pre-tax distribution rate, 4.7% after-tax distribution rate, minimal tax dilution; Tax-Equivalent Distribution Rate, 7.5%
BREIT Tax Features: Class I Distribution Rate, 4.8% pre-tax distribution rate, 4.7% after-tax distribution rate, minimal tax dilution; Tax-Equivalent Distribution Rate, 7.5%

Note: The above assumes that the investment in BREIT shares is not sold or redeemed. The tax-equivalent distribution rate would be up to 1.5% lower after taking into account deferred capital gains tax that would be payable upon redemption. See notes. [ 6 ][ 7 ][ 8 ]

Understanding REIT Tax Treatment [ 3 ]

Real Estate Investtent Trust (REIT) distributions are taxed at different rates depending on whether they are characterized as ordinary income, capital gains or return of capital.

  • ROC distributions are tax deferred until redemption, at which time they give rise to capital gains

  • A portion of distributions that might otherwise be treated as ordinary income as ROC due to real estate-related factors such as depreciation

  • REIT investors benefit from a 20% tax rate reduction to individual tax rates on the ordinary income portion of distributions [ 9 ]

  • Inherited REIT shares are generally eligible for a tax-free step-up in basis to the prevailing fair market value at the time of transfer [ 10 ]

BREIT Tax Highlights
BREIT Tax Highlights
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Performance

Why Invest in BREIT

Important Disclosure Information

This page and its contents are not to be viewed by or distributed to financial advisors or investors in the states of New Jersey, Ohio or Washington.

All information is as of December 31, 2024, unless otherwise noted. There can be no assurance that any Blackstone fund or investment will be able to implement its investment strategy, achieve its objectives, or avoid substantial losses. Financial data is estimated and unaudited. This tax information is provided for informational purposes only, is subject to material change, and should not be relied upon as a guarantee or prediction of tax effects. This material also does not constitute tax advice to, and should not be relied upon by, potential investors, who should consult their own tax advisors regarding the matters discussed herein and the tax consequences of an investment. A return of capital in this context is intended to mean a current income distribution which is not a taxable dividend (as defined in IRC Section 316) and which reduces or exceeds the adjusted basis of the shareholder’s stock (i.e., a Section 301(c)(2) or Section 302(c)(3) distribution). No inference should be made about the source of the current income distribution (including the taxable and non taxable components). This material contains references to our net asset value (“NAV”) and NAV based calculations, which involve significant professional judgment. Our NAV is generally equal to the fair value of our assets less outstanding liabilities, calculated in accordance with our valuation guidelines. The calculated value of our assets and liabilities may differ from our actual realizable value or future value which would affect the NAV as well as any returns derived from that NAV, and ultimately the value of your investment. As return information is calculated based on NAV, return information presented will be impacted should the assumptions on which NAV was determined prove to be incorrect. NAV is not a measure used under generally accepted accounting principles (“GAAP”) and will likely differ from the GAAP value of our equity reflected in our financial statements. As of December 31, 2024, our total equity under GAAP, excluding non-controlling third-party JV interests, was $30.3 billion and our NAV was $54.0 billion. As of December 31, 2024, our NAV per share was $13.70, $13.48, $13.39 and $13.71 for Class S, Class T, Class D and Class I shares, respectively, and GAAP equity per share/unit was $7.70. GAAP equity accounts for net income as calculated under GAAP, and we have incurred $0.9 billion in net losses, excluding net losses attributable to non-controlling interests in third-party JV interests, for the year ended December 31, 2024. Our net income (loss) as calculated under GAAP and a reconciliation of our GAAP equity, excluding non-controlling third-party JV interests, to our NAV are provided in our annual and interim financial statements. Our inception to date cash flows from operating activities, along with net gains from investment realizations, have funded 100% of our distributions through December 31, 2024. See “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Distributions” in BREIT’s Annual Report on Form 10-K for more information. For further information, please refer to “Net Asset Value Calculation and Valuation Guidelines” in BREIT’s prospectus, which describes our valuation process and the independent third parties who assist us.

Important Disclosure Information
Summary of Risk Factors
Forward-Looking Statements
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As of December 31, 2024, BREIT has delivered 94, 92, 94 and 91 months of consecutive distributions for the Class I, D, S and T shares, respectively. Distributions are not guaranteed and may be funded from sources other than cash flow from operations, including, without limitation, borrowings, the sale of our assets, repayments of our real estate debt investments, return of capital or offering proceeds, and advances or the deferral of fees and expenses. We have no limits on the amounts we may fund from such sources.
As of December 31, 2024. Performance varies by share class. Distribution rates (pre tax) for the other class shares are as follows: Class D: 4.6%; Class S: 3.9% and Class T: 4.0%. Reflects the current month’s distribution as of December 31, 2024 annualized and divided by the prior month’s net asset value, which is inclusive of all fees and expenses. There is no assurance we will pay distributions in any particular amount, if at all. Any distributions we make will be at the discretion of our board of directors. Our inception to date cash flows from operating activities, along with net gains from investment realizations, have funded 100% of our distributions through December 31, 2024. See “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Distributions” in BREIT’s Annual Report on Form 10-K for more information. Class I shares require a minimum investment of $1,000,000, unless waived by the dealer manager, and are generally available for purchase only through fee based programs, also known as wrap accounts, or other similar alternative fee arrangements that provide access to Class I shares, or by our officers and directors, officers and employees of our affiliates, and their immediate family members. Before making an investment decision, prospective investors should consult with their investment adviser regarding their account type and classes of common stock they may be eligible to purchase.
BREIT’s after tax distribution rate for all share classes as of December 31, 2024 were as follows: Class I: 4.7% (4.8% pre‑tax ‑ 0.04% tax dilution = 4.7% after‑tax); Class D: 4.6% (4.6% pre‑tax ‑ 0.04% tax dilution = 4.6% after‑tax); Class S: 3.9% (3.9% pre‑tax ‑ 0.04% tax dilution = 3.9% after‑tax); Class T: 3.9% (4.0% pre‑tax ‑ 0.04% tax dilution = 3.9% after‑tax). Calculations may not sum due to rounding. After tax distribution rate is reflective of the current tax year and does not take into account other taxes that may be owed on an investment in a REIT when the investor redeems his or her shares. Upon redemption, the investor may be subject to higher capital gains taxes as a result of a lower cost basis due to the return of capital distributions.
Assumes that the investment in BREIT shares is not sold or redeemed. The tax-equivalent distribution rate would be up to 1.5% lower after taking into account deferred capital gains tax that would be payable upon redemption. See Notes 6, 7 and 9.
Tax dilution refers to the difference between the pre-tax and after-tax distribution rates. The dilution for all share classes based on BREIT’s annualized distribution rate as of December 31, 2024, were as follows: Class I: 0.04%; Class D: 0.04%; Class S: 0.04%; Class T: 0.04%. Reflects BREIT’s 2024 ROC of 96%. BREIT’s ROC in 2017, 2018, 2019, 2020, 2021, 2022 and 2023 was 66%, 97%, 90%, 100%, 92%, 94% and 85%, respectively.
Tax-equivalent distribution rate herein reflects the pre-tax distribution rate an investor would need to receive from a theoretical investment to match the 4.7% after-tax distribution rate earned by a BREIT Class I stockholder in 2024 based on BREIT’s 2024 ROC of 96%, if the distributions from the theoretical investment (i) were classified as ordinary income subject to tax at the top marginal tax rate of 37%, (ii) did not benefit from the 20% tax rate deduction and (iii) were not classified as ROC. The ordinary income tax rate could change in the future. Tax-equivalent distribution rate for the other share classes are as follows: Class D: 7.2%; Class S: 6.1%; and Class T: 6.2%. The tax‑equivalent distribution rate would be reduced by 1.5%, 1.4%, 1.2% and 1.2% for Class I, D, S and T shares, respectively, taking into account deferred capital gains tax that would be payable upon redemption. This assumes a one-year holding period and includes the impact of deferred capital gains tax incurred in connection with a redemption of BREIT shares. Upon redemption, an investor is assumed to be subject to tax on all prior return of capital distributions at the current maximum capital gains rate of 20%. The capital gains rate could change in the future. Investors should consult their own tax advisors.
Return of capital distributions reduce the stockholder’s tax basis in the year the distribution is received, and generally defer taxes on that portion until the stockholder’s stock is sold via redemption. Upon redemption, the investor may be subject to higher capital gains taxes as a result of a lower cost basis due to the return of capital distributions. Certain non-cash deductions, such as depreciation and amortization, lower the taxable income for REIT distributions.
Investors should be aware that a REIT’s ROC percentage may vary significantly in a given year and, as a result, the impact of the tax law may vary significantly from year to year. The hypothetical example is intended to show the likely effects of existing tax laws and is for information purposes only. There can be no assurance that the actual results will be similar to the example set forth herein or that BREIT will be able to effectively implement its investment strategy, achieve its investment objectives, be profitable or avoid losses. While we currently believe that the estimations and assumptions referenced herein are reasonable under the circumstances, there is no guarantee that the conditions upon which such assumptions are based will materialize or are otherwise applicable. This example does not constitute a forecast, and all assumptions herein are subject to uncertainties, changes and other risks, any of which may cause the relevant actual, financial and other results to be materially different from the results expressed or implied by the information presented herein. No assurance, representation or warranty is made by any person that any of the estimations herein will be achieved, and no recipient of this example should rely on such estimations. Investors may also be subject to net investment income taxes of 3.8% and/or state income tax in their state of residence, which would lower the after-tax distribution rate received by the investor.
At this time, the 20% rate deduction to individual tax rates on the ordinary income portion of distributions is set to expire on December 31, 2025. The tax benefits are not applicable to capital gain dividends or certain qualified dividend income and are only available for qualified REITs. If BREIT did not qualify as a REIT, the tax benefit would be unavailable. BREIT’s board also has the authority to revoke its REIT election. There may be adverse legislative or regulatory tax changes and other investments may offer tax advantages without the set expiration. An accelerated depreciation schedule does not guarantee a profitable return on investment and return of capital reduces the basis of the investment.
Eligibility for this benefit is dependent on the investor’s specific facts and circumstances. This information does not constitute tax advice to, and should not be relied upon by, potential investors, who should consult their own tax advisors.