Blackstone Is Buying REITs Hand Over Fist

seekingalpha04-18

Blackstone is one of the most sophisticated real estate investment firms in the world.And they are aggressively buying REITs.I explain why and what this means for REIT investors. Adam Gault ...

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Adam Gault ...</p>\n\n<a href=\"https://seekingalpha.com/article/4683985-blackstone-buying-reits-hand-over-fist\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Blackstone Is Buying REITs Hand Over Fist</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBlackstone Is Buying REITs Hand Over Fist\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-18 19:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4683985-blackstone-buying-reits-hand-over-fist><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Blackstone is one of the most sophisticated real estate investment firms in the world.And they are aggressively buying REITs.I explain why and what this means for REIT investors.   Adam Gault ...</p>\n\n<a href=\"https://seekingalpha.com/article/4683985-blackstone-buying-reits-hand-over-fist\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4135","symbol_name":"资产管理与托管银行","start_time":0,"source_url":"https://seekingalpha.com/article/4683985-blackstone-buying-reits-hand-over-fist","article_id":"2428629175","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/88621476/image_88621476.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2428629175","pubTimestamp":1713439800,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Blackstone is one of the most sophisticated real estate investment firms in the world.And they are aggressively buying REITs.I explain why and what this means for REIT investors.   Adam Gault Blackstone  is one of the biggest private equity investment groups in the world. They control over a trillion dollars' worth of investments and have one of the best track records and reputations in the entire investment world. Their leaders, Steven Schwarzman and Jonathan Gray, are both self-made billionaires and considered to be some of the world's best investors. They have a particularly strong reputation in the real estate space. They are the world's biggest private landlords, owning ~$600 worth of real estate, and they are famous for being highly sophisticated and opportunistic. They seek to buy at a discount to fair value and then make improvements to create additional value and earn market-beating returns. For this reason, most real estate investors closely follow what they are up to. What a","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4135":"资产管理与托管银行","TCN.AU":"Techniche Ltd","IE00BLSP4239.USD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis USD Plus","IE00BLSP4452.SGD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis SGD-H Plus","IE0004445239.USD":"JANUS HENDERSON US FORTY \"A2\" (USD) ACC","TCN":"Tricon Residential Inc","BK4215":"住宅房地产投资信托","BK4585":"ETF&股票定投概念","VNQ":"不动产信托指数ETF-Vanguard","IE00BBT3K403.USD":"LEGG MASON CLEARBRIDGE TACTICAL DIVIDEND INCOME \"A(USD) ACC","CPT.AU":"Cipherpoint Ltd","CPT":"卡姆登物业信托","BK4205":"房地产经营公司","AIRC":"Apartment Income REIT Corp","BK4588":"碎股","CFA.SI":"NikkoAM-STC Asia REIT","CFA":"VictoryShares US 500 Volatility Wtd ETF","BX":"黑石","BK7024":"系统软件","BK4233":"房地产运营公司"},"translate_title":"黑石正在全力购买房地产投资信托基金","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"CFA.SI":1,"VNQ":1,"TCN.AU":1,"TCN":1,"CPT.AU":1,"CPT":1,"AIRC":1,"CFA":1,"BX":1},"content_text":"Blackstone is one of the most sophisticated real estate investment firms in the world.And they are aggressively buying REITs.I explain why and what this means for REIT investors.   Adam Gault Blackstone (BX) is one of the biggest private equity investment groups in the world. They control over a trillion dollars' worth of investments and have one of the best track records and reputations in the entire investment world. Their leaders, Steven Schwarzman and Jonathan Gray, are both self-made billionaires and considered to be some of the world's best investors. They have a particularly strong reputation in the real estate space. They are the world's biggest private landlords, owning ~$600 worth of real estate, and they are famous for being highly sophisticated and opportunistic. They seek to buy at a discount to fair value and then make improvements to create additional value and earn market-beating returns. For this reason, most real estate investors closely follow what they are up to. What are they buying? And what prices are they paying? Because if they are buying something in particular, it probably means that it is a good deal and will likely generate strong returns over time. Well... with that in mind, Blackstone is today aggressively buying publicly listed REITs (VNQ).  Just last week, they announced that they would acquire Apartment Income REIT (AIRC) in a massive $10 billion transaction, paying a 25% premium to its latest share price. Data by YCharts This is the biggest apartment REIT transaction ever for Blackstone, which tells you loud and clear that apartment REITs are today undervalued They are willing to pay a 25% premium, and they still think that they are getting a good deal, which just shows how cheap REITs have gotten. Even after accounting for the premium, the implied cap rate of the deal is around 5.7%, which is quite a bit higher than what they would get for comparable assets in the private market and that is why they are buying REITs. They essentially allow them to buy real estate at a discount to its fair value. There are many REITs today that trade 30-50% discounts relative to the fair value of their real estate, and you then get the added benefits of diversification, liquidity, professional management, and limited liability. Just to give you a quick example: BSR REIT's (OTCPK:BSRTF/HOM.U:CA) latest net asset value per share is $18, but its shares trade today at just $11 in the open market, representing a steep 40% discount for Texan apartment communities.   BSR REIT If you were offered to buy good real estate at 60 cents on the dollar in the private market, you would probably jump on the opportunity, but somehow because REITs are publicly listed, investors are reluctant to buy them. Blackstone is playing the long game, and they understand that real estate, whether private or public, is a great investment when bought at a steep discount, so they are acting on this opportunity. And this latest Blackstone acquisition is not an isolated case.  In late 2023, they acquired Tricon Residential (TCN) in a $3.5 billion transaction and paid a 30% premium for that one. And in the two years prior to that, they bought another $30 billion worth of REITs. This included:  American Campus Communities PS Business Parks Preferred Apartment REIT Industrials REIT Etc.  So in total, they are now at over $40 billion of REIT investments during this bear market... Warren Buffett has famously said that \"when it is raining gold, you should put a bucket, not the thimble\" and Blackstone took that to the letter! The best part here is that you can participate in this exact same opportunity and get even better deals than Blackstone. They are working with billions of capital and as a result, they are a lot less flexible when allocating capital and must pay large premiums when investing in REITs. But you, as a small individual investor, can buy small positions in the open market and avoid paying any premium. Blackstone paid a 5.7% implied cap rate for AIRC, but many of its apartment peers like Camden Property Trust (CPT) are today trading at closer to a 6.5% implied cap rate. If the world's biggest and most sophisticated real estate investor thinks that 5.7% is a good deal, then 6.5% is a great deal. But why is Blackstone now suddenly closing such massive deals in the REIT sector? It is likely because they think that the window of opportunity could be closing. According to the FedWatch tool, interest rates are expected to be 100 basis points lower in a year from now: FedWatch If these odds are correct, then it will a lot harder to acquire apartment communities at such a high cap rate in a year from now. Blackstone knows this, and that explains why they are now stepping up their investment activity. REITs crashed due to rising interest rates, and therefore cuts to interest rates would likely have the opposite effect and lead to a recovery of the REIT sector. Timing the market or predicting exactly when interest rates will be cut, of course, isn't possible, but you don't need to do that. Buying good real estate at a discount has always been a good idea, and this time likely won't be any different.  Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2428629175"}