Our high conviction, thematic investment approach has led to a portfolio concentrated in sectors we believe will outperform
Past performance does not guarantee future results. Financial information is approximate and as of June 30, 2022, unless otherwise noted. The words “we”, “us”, and “our” refer to BREIT, together with its consolidated subsidiaries, including BREIT Operating Partnership L.P., (the “Operating Partnership”), unless the context requires otherwise.
NAV Calculation and Reconciliation. 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 NAV calculation and 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 different. 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 March 31, 2022, our total equity under GAAP, excluding non-controlling third-party JV interests, was $43.8 billion and our NAV was $63.3 billion. As of March 31, 2022, our NAV per share was $14.82, $14.62, $14.53 and $14.82 for Class S, Class T, Class D and Class I shares, respectively, and GAAP equity per share/unit was $10.24. GAAP equity accounts for net losses as calculated under GAAP, and we have incurred $95.9 million in net losses, excluding net losses attributable to non-controlling interests in third-party JV interests, for the three months ended March 31, 2022. Our net losses 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. As of March 31, 2022, 100% of inception to date distributions were funded from cash flows from operations. 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.
“Rental Housing” includes multifamily (40%), single family rental (8%), student housing (3%), manufactured housing (1%) and senior housing (<1%).
- Occupancy is an important real estate metric because it measures the utilization of properties in the portfolio. Occupancy is weighted by the total value of all consolidated real estate properties, excluding our hospitality investments, and any third party interests in such properties. For our industrial, data center, retail and office investments, occupancy includes all leased square footage as of the date indicated. For our multifamily and student housing investments, occupancy is defined as the percentage of actual rent divided by gross potential rent (defined as actual rent for occupied units and market rent for vacant units) for the three months ended on the date indicated. For our net lease investments, occupancy includes leased properties as of the date indicated. For our single family rental investments, the occupancy rate includes occupied homes for the three months ended on the date indicated. For our self storage, and manufactured housing and senior living investments, the occupancy rate includes occupied square footage, occupied sites and occupied units, respectively, as of the date indicated. The average occupancy rate for our hospitality investments was 66% for the twelve months ended March 31, 2022. Hospitality investments owned less than twelve months are excluded from the average occupancy rate calculation.
- 3-year returns for all share classes were as follows: Class S shares (no sales load) 15.5%; Class S shares (with sales load) 14.2%; Class T shares (no sales load) 15.7%; Class T shares (with sales load) 14.4%; Class D shares (no sales load) 16.0%; Class D shares (with sales load) 15.5%; Class I shares 16.6%. Inception to date (“ITD”) returns for all share classes were as follows: Class S shares (no sales load) 12.5%; Class S shares (with sales load) 11.8%; Class T shares (no sales load) 13.1%; Class T shares (with sales load) 12.3%; Class D shares (no sales load) 13.5%; Class D shares (with sales load) 13.2%; Class I shares 13.5%.The foregoing reflects the percent change in the NAV per share from the beginning of the applicable period, plus the amount of any distribution per share declared in the period. Return information is not a measure used under GAAP. BREIT has incurred $95.9 million in net losses, excluding net losses attributable to non-controlling interests in third-party JV interests, for the three months ended March 31, 2022. This amount largely reflects the expense of real estate depreciation and amortization in accordance with GAAP. Additional information about our net losses as calculated under GAAP is included in our annual and interim financial statements. All returns shown assume reinvestment of distributions pursuant to BREIT’s distribution reinvestment plan, are derived from unaudited financial information, and are net of all BREIT expenses, including general and administrative expenses, transaction-related expenses, management fees, performance participation allocation, and share class-specific fees, but exclude the impact of early repurchase deductions on the repurchase of shares that have been outstanding for less than one year. Past performance is not necessarily indicative of future results. Class S, Class T, and Class D shares listed as (with sales load) reflect the returns after the maximum up-front selling commission and dealer manager fees. Class S, Class T and Class D shares listed as (no sales load) exclude up-front selling commissions and dealer manager fees. With sales load returns assume payment of the maximum upfront sales charge at initial subscription (3.5% for Class S and Class T shares; 1.5% for Class D shares). The sales charge for Class D shares became effective May 1, 2018. The inception dates for the Class S, T, D and I shares are January 1, 2017, June 1, 2017, May 1, 2017 and January 1, 2017, respectively. 3-year refers to the thirty-six months prior to current month-end. The returns have been prepared using unaudited data and valuations of the underlying investments in BREIT’s portfolio, which are estimates of fair value and form the basis for BREIT’s NAV. Valuations based upon unaudited reports from the underlying investments may be subject to later adjustments, may not correspond to realized value and may not accurately reflect the price at which assets could be liquidated. Please refer to “NAV Calculation and Reconciliation” above for additional information on our determination of NAV. 3-year and ITD returns are annualized consistent with the IPA Practice Guideline 2018. Please refer to “NAV Calculation and Reconciliation” above for additional information on our determination of NAV.
- Growth market means a market with high population growth relative to the U.S. average. While BREIT generally seeks to acquire real estate properties located in growth markets, certain properties may not be located in such markets. Although a market may be a growth market as of the date of the publication of this material, demographics and trends may change and investors are cautioned on relying upon the data presented as there is no guarantee that historical trends will continue or that BREIT could benefit from such trends. U.S. Census Bureau, as of July 2020, released in May 2021.
- BREIT invests primarily in U.S. commercial real estate and to a lesser extent in countries outside of the U.S. The select markets that are named represent BREIT’s top 10 metropolitan statistical areas (“MSAs”) by portfolio weighting. BREIT is invested in additional MSAs which are not named above. Shading reflects the concentration of all real estate properties and unconsolidated investments in each state. Weighting is measured as the asset value of real estate properties and unconsolidated investments for each market against the total asset value of all (i) real estate properties, excluding the value of any third party interests in such real estate properties, and (ii) unconsolidated investments. “Unconsolidated investments” refer to joint venture investments that do not meet the accounting requirements for consolidation under GAAP. For these investments, BREIT utilizes the GAAP equity method of accounting, which accounts for investments at their equity value rather than consolidating the investments’ assets and liabilities onto the balance sheet. Total asset value is measured as (i) the asset value of real estate investments (based on fair value), excluding any third party interests in such real estate investments, plus (ii) the equity in our real estate debt investments measured at fair value (defined as the asset value of our real estate debt investments less the financing on such investments), but excluding any other assets (such as cash or any other cash equivalents). The total asset value would be higher if such amounts were included and the value of our real estate debt investments was not decreased by the financing on such investments. As of June 30, 2022, BREIT’s total asset value was $116 billion.
- “Property Sector” weighting is measured as the asset value of real estate investments for each sector category (Rental Housing, Industrial, Net Lease, Data Centers, Self Storage, Hospitality, Office, Retail) divided by the total asset value of all real estate investments, excluding the value of any third-party interests in such real estate investments (“Real Estate TAV”). The following sectors each have subsectors comprising over 1.0% of Real Estate TAV. Rental Housing: multifamily, single family rental, student housing and manufactured housing; Industrial: warehouses; and Hospitality: full service and select service hotels. Geographic allocation weighting is measured as the asset value of real estate properties and unconsolidated property investments for each geographical category (South, West, East, Midwest, Non-U.S.) divided by the total asset value of all (1) real estate properties, excluding the value of any third-party interests in such real estate properties, and (2) unconsolidated property investments. Please see the prospectus for more information on BREIT’s investments.
- U.S. Census Bureau, as of March 31, 2022. Represents average annual housing completions for periods indicated. Pre-Global Financial Crisis represents 1998-2007. Last Decade represents the trailing 10-year period ending March 31, 2022. Shortfall represents the difference in housing completions between Pre-Global Financial Crisis and Last Decade periods.
- Axiometrics, as of March 31, 2022. Axiometrics data reflects market-rate, attached dwellings with five or more units leased through a central management company. BREIT Top 10 Rental Housing Markets weighting is measured as the asset value of real estate investments in the rental housing sector divided by the total asset value of all real estate investments, excluding the value of any third-party interests in such real estate investments. “Real estate investments” includes our direct property investments, unconsolidated investments, and equity in public and private real estate related companies.
- U.S. Census Bureau, as of December 31, 2021.
- U.S. Census Bureau, as of December 31, 2021. Penetration calculated on a trailing one-year basis and represents e-commerce sales’ share of total retail sales excluding auto, gas and food services.
- CBRE, as of as of March 31, 2022. Rent growth represents year-over-year net asking rents weighted by net absorption for the year. Vacancy represents vacant U.S. industrial space for the respective year or quarter weighted by total U.S. industrial stock.
- The selected images of certain BREIT investments above are provided for illustrative purposes only, are not representative of all BREIT investments of a given property type and are not representative of BREIT’s entire portfolio. It should not be assumed that BREIT’s investment in the properties identified and discussed herein were or will be profitable.
Summary of Risk Factors
BREIT is a non-listed REIT that invests primarily in stabilized income-generating commercial real estate investments across asset classes in the United States and, to a lesser extent, real estate debt investments, with a focus on current income. We invest to a lesser extent in countries outside of the U.S. This investment involves a high degree of risk. You should purchase these securities only if you can afford the complete loss of your investment. You should read the prospectus carefully for a description of the risks associated with an investment in BREIT. These risks include, but are not limited to, the following:
- There is no public trading market for our common stock and repurchase of shares by us will likely be the only way to dispose of your shares. We are not obligated to repurchase any shares under our share repurchase plan and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased. In addition, repurchases will be subject to available liquidity and other significant restrictions. Further, our board of directors may make exceptions to, modify or suspend our share repurchase plan. As a result, our shares should be considered as having only limited liquidity and at times may be illiquid.
- Distributions are not guaranteed and may be funded from sources other than cash flow from operations, including borrowings, offering proceeds, the sale of our assets and repayments of our real estate debt investments. We have no limits on the amounts we may fund from such sources.
- The purchase and repurchase price for shares of our common stock are generally based on our prior month’s net asset value (“NAV”) and are not based on any public trading market. While there will be independent annual appraisals of our properties, the appraisal of properties is inherently subjective, and our NAV may not accurately reflect the actual price at which our properties could be liquidated on any given day. The NAV per share, if calculated as of the date on which you make your subscription request or repurchase request, may be significantly different than the transaction price you pay or the repurchase price you receive. Certain of our investments or liabilities are subject to high levels of volatility from time to time and could change in value significantly between the end of the prior month as of which our NAV is determined and the date that you acquire or repurchase our shares, however the prior month’s NAV per share will generally continue to be used as the offering price per share and repurchase price per share.
- We are dependent on BX REIT Advisors L.L.C. (the “Adviser”) to conduct our operations. The Adviser will face conflicts of interest as a result of, among other things, the allocation of investment opportunities among us and Other Blackstone Accounts (as defined in BREIT’s prospectus), the allocation of time of its investment professionals and the substantial fees that we will pay to the Adviser.
- On acquiring shares, you will experience immediate dilution in the net tangible book value of your investment.
- There are limits on the ownership and transferability of our shares.
- If we fail to qualify as a REIT and no relief provisions apply, our NAV and cash available for distribution to our stockholders could materially decrease.
- We do not own the Blackstone name, but we are permitted to use it as part of our corporate name pursuant to a trademark license agreement with an affiliate of Blackstone Inc. (together with its affiliates, “Blackstone”). Use of the name by other parties or the termination of our trademark license agreement may harm our business.
Certain countries have been susceptible to epidemics which may be designated as pandemics by world health authorities, most recently COVID-19. The outbreak of such epidemics, together with any resulting restrictions on travel or quarantines imposed, has had and may in the future have a negative impact on the economy and business activity globally (including in the countries in which BREIT invests), and thereby may adversely affect the performance of BREIT’s investments. Furthermore, the rapid development of epidemics could preclude prediction as to their ultimate adverse impact on economic and market conditions, and, as a result, presents material uncertainty and risk with respect to BREIT and the performance of its investments. For further information on the impact of COVID-19 on BREIT, please refer to “Risk Factors—The current outbreak of the novel coronavirus, or COVID-19, has caused severe disruptions in the U.S. and global economy and has had an adverse impact on our performance and results of operations” in BREIT’s prospectus.
On February 24, 2022, Russian troops began a full-scale invasion of Ukraine and, as of the date of this material, the countries remain in active armed conflict. Around the same time, the United States, the United Kingdom, the European Union, and several other nations announced a broad array of new or expanded sanctions, export controls, and other measures against Russia, Russia-backed separatist regions in Ukraine, and certain banks, companies, government officials, and other individuals in Russia and Belarus. The ongoing conflict and the rapidly evolving measures in response could be expected to have a negative impact on the economy and business activity globally (including in the countries in which BREIT invests), and therefore could adversely affect the performance of BREIT’s investments. The severity and duration of the conflict and its impact on global economic and market conditions are impossible to predict, and as a result, could present material uncertainty and risk with respect to BREIT and the performance of its investments and operations, and the ability of BREIT to achieve its investment objectives. Similar risks will exist to the extent that any investments, service providers, vendors or certain other parties have material operations or assets in Russia, Ukraine, Belarus, or the immediate surrounding areas.
Certain information contained in this material has been obtained from sources outside Blackstone, which in certain cases has not been updated through the date hereof. While such information is believed to be reliable for purposes used herein, no representations are made as to the accuracy or completeness thereof and none of Blackstone, its funds, nor any of their affiliates takes any responsibility for, and has not independently verified, any such information. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates.
Opinions expressed reflect the current opinions of BREIT as of the date appearing in the materials only and are based on BREIT’s opinions of the current market environment, which is subject to change. Stockholders, financial professionals and prospective investors should not rely solely upon the information presented when making an investment decision and should review the most recent prospectus, as supplemented, available at www.breit.com. Certain information contained in the materials discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice.
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Certain information contained in this communication constitutes “forward-looking statements” within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of forward looking terminology, such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “identified,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates”, “confident,” “conviction,” or the negative versions of these words or other comparable words thereof. These may include financial estimates and their underlying assumptions, statements about plans, objectives and expectations with respect to future operations, statements with respect to acquisitions, statements regarding future performance and statements regarding identified but not yet closed acquisitions. Such forward-looking statements are inherently uncertain and there are or may be important factors that could cause actual outcomes or results to differ materially from those indicated in such statements. BREIT believes these factors also include, but are not limited to, those described under the section entitled “Risk Factors” in BREIT’s prospectus and annual report for the most recent fiscal year, and any such updated factors included in its periodic filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this document (or BREIT’s prospectus and other filings). Except as otherwise required by federal securities laws, BREIT undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
Blackstone Securities Partners L.P. (“BSP”) is a broker-dealer whose purpose is to distribute Blackstone managed or affiliated products. BSP provides services to its Blackstone affiliates, not to investors in its funds, strategies or other products. BSP does not make any recommendation regarding, and will not monitor, any investment. As such, when BSP presents an investment strategy or product to an investor, BSP does not collect the information necessary to determine—and BSP does not engage in a determination regarding—whether an investment in the strategy or product is in the best interests of, or is suitable for, the investor. You should exercise your own judgment and/or consult with a professional advisor to determine whether it is advisable for you to invest in any Blackstone strategy or product. Please note that BSP may not provide the kinds of financial services that you might expect from another financial intermediary, such as overseeing any brokerage or similar account. For financial advice relating to an investment in any Blackstone strategy or product, contact your own professional advisor.
This website must be read in conjunction with BREIT’s prospectus in order to fully understand all the implications and risks of an investment in BREIT. Please refer to the prospectus for more information regarding state suitability standards and consult a financial professional for share class availability and appropriateness.
THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES DESCRIBED IN THE PROSPECTUS FOR THE OFFERING, AS AMENDED AND SUPPLEMENT (THE “PROSPECTUS”). THE OFFERING IS MADE ONLY BY THE PROSPECTUS AND THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE PROSPECTUS. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER STATE SECURITIES REGULATOR HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR DETERMINED IF THE PROSPECTUS IS TRUTHFUL OR COMPLETE. IN ADDITION, THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THE OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.