Blackstone Group LP's flagship real estate fund for retail investors achieved its best performance in three years during 2025, driven by its investments in data centers. According to the company, the Blackstone Real Estate Income Trust (Breit) posted a total annual return of 8.1%, with assets under management exceeding $54 billion by year-end. This return rate surpassed the 2% recorded in 2024 and marked a significant recovery from the 0.5% loss in 2023.
The acquisition of QTS, one of the world's largest data center operators, by Blackstone was a primary factor contributing to last year's returns. Due to surging demand from artificial intelligence (AI) applications and other technology companies, the value of QTS has climbed substantially since it was acquired by Breit and two other Blackstone funds in 2021. Breit's performance stands in stark contrast to the period in late 2022 and 2023, when a wave of investor redemptions, prompted by falling property values and rising interest rates, forced the fund to limit withdrawals. At that time, investors shifted their capital into safer investments, such as money market funds, which were offering yields not seen in years. Since the beginning of 2024, Blackstone's fund has been able to fulfill all investor redemption requests. This turnaround, combined with the fund's continuously improving performance throughout 2025, signals a recovery in the commercial real estate sector after several years of being weighed down by high interest rates.
Comments