Blackstone’s BREIT Suffers Worst Annual Performance Since Creation 

The Blackstone Real Estate Income Trust (BREIT) experienced its lowest annual return since its creation in 2017, with a 0.5% loss in 2023 (following returns of 8.4% in 2022 and over 30% in 2021).  

This demonstrates that Blackstone’s flagship real estate trust for high-net-worth and institutional investors was impacted by the Federal Reserve’s monetary tightening campaign and the subsequent commercial real estate decline. 

“We built BREIT as an all-weather strategy designed to build long-term wealth across market cycles. We are pleased that BREIT has delivered an 11% annualized net return since inception seven years ago (January 1, 2017),” Blackstone told investors in a shareholder update. 

BREIT’s performance also underperformed the S&P500’s 26% return. The fund’s net asset value is approximately $62 billion, according to Bloomberg.  

Blackstone, meanwhile, has been limiting investor redemption requests for over a year. It has returned $14.3 billion in investor capital since November 30, 2022. The positive development is that the backlog in redemption requests has lately begun to ease.   

Bloomberg noted, “Blackstone had enlisted interest-rate hedges to mitigate the pain from soaring borrowing costs. The firm said in a memo that even if there might be some immediate sting, sustained lower rates will lift real estate values across the fund’s portfolio.”