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Update for BREIT Investors: Blackstone Pays Out Less Than 15% of Redemption Requests in March

April 25, 2023

Blackstone Real Estate Income Trust (BREIT) Investment Losses? Contact KlaymanToskes

National investment loss lawyers KlaymanToskes continues its investigation of major wall street brokerage firms and financial advisors that may have sold Blackstone, Inc. and Blackstone Real Estate Income Trust (“BREIT”), following the company’s announcement that it received redemption requests totaling $4.5 billion for the month of March, but only paid out $666 million. 

This represents less than 15 percent (approximately 14.8%) of investors’ requested withdrawals being redeemed last month, and also marks Blackstone’s fifth consecutive month of limiting redemptions for investors. Blackstone has limited redemptions five times since November 2022. 

KlaymanToskes previously reported the company’s announcement that it reached its monthly redemption limit in January 2023, by fulfilling approximately $1.3 Billion of repurchase requests. As a result, the stock of Blackstone, Inc. dropped nearly 10 percent. 

According to a recent letter to investors, in February, BREIT’s redemption requests reached $3.9 billion, with the company fulfilling approximately $1.4 billion, “which is equal to 2% of NAV and represents ~35% of the shares submitted for repurchase.” In March, the number of requests increased to $4.5 billion, while the company’s redemptions decreased, at less than 15 percent.

According to BREIT’s letter, “its Share Repurchase Plan (the “Repurchase Plan”) has allowed for repurchases up to 2% of net asset value (“NAV”) in any month and 5% of NAV in a calendar quarter.” The company states that its SRP was designed this way to “prevent a liquidity mismatch and maximize long-term shareholder value.”

How Can Investors Recover BREIT Losses?

KlaymanToskes’ investigation notes issues of increased borrowing costs that could result in Blackstone potentially suspending repurchase requests altogether. Additionally, with the increased turmoil in U.S. and global financial markets, including bank failures such as SVB, investors should remain vigilant of the risks of investing with commercial real estate developers and in non-traded REITs. 

According to securities attorney, Lawrence L. Klayman, “Non-traded REITs are subject to risks that are not easily understood by investors who lack the sophistication to determine the nature of the risks associated with the strategy. Brokers and financial advisors have a responsibility to make suitable investment recommendations that are in the investor’s best interest.”

Our firm believes that a Financial Industry Regulatory Authority (“FINRA”) securities arbitration claim may be the best solution to recover investment losses. FINRA arbitration occurs with increased speed and efficiency over court proceedings and is often a more cost-effective process for investors. 

If you suffered investment losses in Blackstone (BREIT) due to the unsuitable investment advice of a full-service brokerage/advisory firm and/or a registered broker/investment advisor, contact attorney Lawrence L. Klayman at (888) 997-9956 or lklayman@klaymantoskes.com for a free consultation to learn about recovery options. 

Our firm offers legal services on a contingency fee basis, meaning we do not collect attorney’s fees unless we are able to obtain a financial recovery for you. 

About KlaymanToskes

KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.

Contact

KlaymanToskes, P.A.

Lawrence L. Klayman, Esq.

888-997-9956

lklayman@klaymantoskes.com

www.klaymantoskes.com