Blackstone REIT Announces Lower NAVs for Month Ended March 31, 2020
April 23, 2020
In a Supplement to the Offering Prospectus filed on April 21, 2020, Blackstone Real Estate Income Trust, Inc. (“BREIT”) announced a lower NAV (down 8.6%) per share for its common stock:
“For the month ending March 31, 2020, BREIT’s Class S NAV per share declined $0.98, from $11.44 as of February 29, 2020 to $10.46 as of March 31, 2020.1 This price movement was driven by unrealized mark-to-market declines across our real estate debt portfolio, as well as reduced valuations of our real estate properties as determined through BREIT’s rigorous monthly valuation process.”
The fall in the NAV was explained as follows:
Real Estate Portfolio Valuation
• Reduced property values were generally attributable to the following factors relating to COVID-19:
· Anticipated slower rental growth and rent relief requests, which have been modest to date, as well as anticipated reductions in projected lease-up of vacant space
· Decreased cash flow in our hospitality assets due to closures of our two full-service hotels and reduced occupancy at our select-service properties, the majority of which remain open
• The Adviser valued each of our properties this month to account for this potential near-term softness in the market, even in the most resilient sectors like multifamily and industrial
Real Estate Debt Portfolio Valuation
• The COVID-19 pandemic caused significant market pricing and liquidity dislocation in March, causing a broad-based market decline across securities including CMBS. This had a significant impact on BREIT’s real estate debt investments, which consist mostly of single asset, single borrower CMBS with high-quality assets and borrowers
• Despite these mark-to-market declines, none of which are realized, we remain optimistic in the strength of these investments on a hold-to-maturity basis
Impact of COVID-19 on Our NAV
The global outbreak of COVID-19 has adversely impacted global commercial activity and contributed to significant volatility in financial markets. Many countries have reacted by instituting quarantines and restrictions on travel and limiting operations for non-essential businesses. Such actions are creating disruption in global supply chains and adversely impacting a number of industries, such as retail, transportation, hospitality and entertainment, as well as negatively impacting most investment asset classes, including real estate.
1 BREIT’s Class I NAV per share declined from $11.42 to $10.44, BREIT’s Class D NAV per share declined from $11.27 to $10.31 and BREIT’s Class T NAV per share declined from $11.23 to $10.27.
Source: SEC
