BREIT Unlocks a New Era of Liquidity: Explore the Secondary Marketplace for REIT Holders
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Blackstone Real Estate Income Trust (BREIT), a major player in the commercial real estate sector, has begun trading shares on a secondary marketplace. But what does this mean for shareholders, and why should you care? In this post, we`ll dissect the finer elements of this change, discuss how it affects investors, and explore the rewards of trading on a secondary marketplace.
Introducing Blackstone REIT:
Let`s learn a bit about BREIT before we get into detail. BREIT is a non-traded Real Estate Investment Trust (REIT) managed by Blackstone, a top-tier global investment firm. Since its introduction in 2017, BREIT has been all about income-generating commercial real estate assets in the United States, boasting a broad portfolio that encompasses office, retail, multifamily, and industrial properties. With a net asset value (NAV) of roughly $39.1 billion as of September 2021, BREIT is a force in the investment sector. Below are some of BREIT`s representative holdings.
| Investment | Sector | Number of Properties | Location | Acquisition Date | Ownership Interest | Square Feet (in 000) | Units / Keys | Occupancy Rate |
|---|---|---|---|---|---|---|---|---|
| ACG V Multifamily | Rental Housing | 2 | Stockton, CA | September 2022 | 95% | 449 units | 94% | 94% |
| American Campus Communities | Rental Housing | 150 | Various | August 2022 | 69% | 36,545 units | 96% | 96% |
| Halo Select Service Portfolio | Hospitality | 6 | Various | August 2022 | 100% | 1,258 keys | 77% | 77% |
| Adare Office | Office | 1 | Dublin, Ireland | August 2022 | 75% | 517 sq. ft | 100% | 100% |
| Sleep Extended Stay Hotel Portfolio7 | Hospitality | 196 | Various | July 2022 | 30% | 24,935 keys | N/A | N/A |
| Pike Multifamily Portfolio4 | Rental Housing | 46 | Various | June 2022 | 100% | 12,594 units | 96% | 96% |
| Atlanta Tech Center 2.0 Office | Office | 1 | Atlanta, GA | June 2022 | 99% | 318 sq. ft | 100% | 100% |
| Pike Office Portfolio4 | Office | 3 | Various | June 2022 | 100% | 1,072 sq. ft | 95% | 95% |
| Pike Retail Portfolio4,11 | Retail | 52 | Various | June 2022 | Various | 5,736 sq. ft | 93% | 93% |
| Rapids Multifamily Portfolio | Rental Housing | 42 | Various | May 2022 | 100% | 12,667 units | 93% | 93% |
| 8 Spruce Street Multifamily | Rental Housing | 1 | New York, NY | May 2022 | 100% | 899 units | 94% | 94% |
| Legacy at Baton Rouge Student Housing | Rental Housing | 1 | Baton Rouge, LA | May 2022 | 97% | 300 units | 99% | 99% |
Secondary Marketplace 101
A secondary marketplace is like an exclusive club where investors can trade shares of otherwise non-traded REITs, offering an alternative to traditional exit strategies such as share redemption programs or waiting for a potential liquidity event such as a merger or IPO. BREIT`s decision to join this club and begin trading shares on a secondary marketplace is a game-changer for its shareholders, as it opens the door to increased liquidity and diversification opportunities where few existed before.
The Perqs of Trading on a Secondary Marketplace
Better Liquidity: The secondary marketplace provides a fresh option for investors looking to cash out or rejig their portfolios. This is especially useful for non-traded REITs like BREIT because they often have limited liquidity choices.
Better Price Discovery: When shares are traded on a secondary marketplace, investors can establish a market price based on supply and demand. This leads to more accurate pricing and a deeper understanding of the investment`s true value.
Flex Factor: The ability to buy and sell shares on the secondary marketplace gives investors the power to tweak their holdings according to shifting market conditions or personal financial situations.
Diversification: Secondary marketplaces can help investors access a larger pool of potential buyers and sellers, making it easier to diversify portfolios and manage risk efficiently.
Why Should Investors Care?
Investors stand to gain a great deal from allowing BREIT shares to trade on a secondary market. It not only provides a different exit strategy and a fresh source of liquidity, but it also gives investors more control over how they manage their money and increases diversification. In other words, BREIT shareholders can now have even more flexibility and control over their portfolios.
The decision by BREIT to list its shares on a secondary market is a significant development in the commercial real estate investment world. As investors continually seek innovative ways to improve their portfolios and manage risk, secondary marketplaces are poised to become a critical instrument for increasing liquidity, price discovery, and diversity of assets. With BREIT entering this market, its shareholders can now take advantage of these new advantages while continuing to profit from the alluring returns and security provided by commercial real estate investments. As always, this is not a solicitation, information is presented herein for entertainment and investors should consult a professional before making any investment.
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