Redemption requests aren't over for Blackstone Inc.'s $70 billion non-traded real estate investment trust, Blackstone Real Estate Income Trust.
The private open-end real estate vehicle mainly marketed to high-net-worth retail investors, dubbed BREIT, faced more withdrawals in April and restricted redemptions for a fifth-straight month at the beginning of April, the megamanager said.
Shareholders asked to redeem $4.5 billion from Blackstone Real Estate Income Trust "in a month of tremendous market volatility and broad-based financial stress," the company said Apr. 3 in a letter to investors. BREIT allowed about $665 million to be withdrawn, or about 15% of what was requested, according to Bloomberg.
Other funds have faced fewer redemption requests, such as Nuveen Global Cities REIT Inc., which paid out $25 million in 2022, the equivalent of 1.3% of NAV, while Hines Global Income Trust reported $47 million in redemption requests, or 2.1% of NAV last year, according to data from Robert A. Stanger & Co. Inc., an investment bank and property funding advisory firm that tracks non-traded REITs.
One startup, LODAS Markets Inc., is banking on investor demand for liquidity for non-traded REITs. LODAS Markets, a web-based exchange launched in 2021, has so far traded 40 non-traded REITs and non-traded business development companies mostly for insurance companies.
"The LODAS marketplace has hundreds of millions of dollars of institutional buy-side interest in these non-public REITs," said Brian King, LODAS chief executive officer based in Overland Park, Kan. "It's a potential lifeline for those who want liquidity but were locked out of recent redemption cycles."
LODAS joins other outlets for secondary trading, including Central Trade and Transfer LLC, which does eBay-style auctions for investors in REITs.
"There's huge amounts of capital looking to redeem, and places like Central Trade & Transfer and LODAS may fill the hole" for liquidity, said Kevin Gannon, Shrewsbury, N.J.-based chief executive officer of Robert A. Stanger & Co. Inc.
In March, BREIT, which focuses on rental housing and industrial property in Sun Belt markets, began trading on the LODAS (liquidity on demand as a service) platform. Trading also is available in Starwood Capital Group SREIT, a $15 billion fund that invests in logistics facilities, residential real estate, extended-stay hotels and multifamily properties.