(Bloomberg) – Blackstone Real Estate Income Trust Inc., Blackstone Inc.’s fund for affluent individuals, reported its largest monthly total return in six months as dividend payments in February and rising rents offset a decline in property valuations.
BREIT’s lowest-fee share class had a total return of 0.7% for the month, which brought its trailing 12-month return to 5.7%, according to a report published Tuesday. The share class was up 8.4% for the whole of 2022 and up 30.2% in 2021.
Growth slowed last year as rising interest rates eroded property values and the tide of investor inflows turned into a tide of redemption requests. BREIT restricted withdrawals for the four months ended February as redemption requests exceeded monthly and quarterly limits.
Along with higher rental income and steady dividends, BREIT’s February returns benefited from hedging positions that added value as interest rates rise. According to Green Street, commercial property prices fell 1.4% across all asset classes in February and 15% over the trailing 12 months.
Founded in 2017, BREIT grew voraciously, acquiring nearly 300,000 residential units, 453 million square feet (4.2 million square meters) of industrial space, hotels, data centers, shopping malls and other real estate. The fund still has around $14 billion in liquidity for potential new acquisitions.
“Where you invest matters and the vast majority of BREIT’s portfolio is in rental housing and logistics in the Sunbelt,” Blackstone said in a statement.
BREIT’s net asset value fell to $70.5 billion after investors withdrew $1.4 billion last month. Net asset value includes an initial $4 billion pledged by the University of California in January but excludes a $500 million follow-up investment from the university.
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