How Blackstone REITs’ Investments Have Performed During Pandemic
June 22, 2020 | James Sprow | Blue Vault
In a June 15, 2
020, filing with the SEC, Blackstone Real Estate Income Trust (the “REIT”) reported an estimated net asset value per share (“NAV”) of $10.5464 for its Class I shares. This estimated NAV was up from $10.4493 per share as of April 30, 2020, for an estimated increase month-to-month of approximately 0.9%. The Class I NAV as of December 31, 2019 was $11.2642. The percentage decrease in the Class I NAV from December 31, 2019 to May 31, 2020 was 7.87%. By way of comparison, the S&P 500 Index over the same period fell 6.55%, but the NAREIT All Equity REIT Index fell 16.39%. Thus, Blackstone REIT’s diversification and the property types in its investment portfolio held up relatively well over the last five months, amidst the devastating impacts of COVID-19 on certain property types.
The hardest hit property types during the pandemic have been hospitality and retail assets. NAREIT’s total returns by property type for YTD 2020 through May 31 reveal that the 15 traded REITs in the Lodging/Resorts sector were down 45.7%. The 18 listed shopping center REITs were down 44.2%. The 21 Apartment REITs were off 18.09%. On the relatively bright side, the 13 Industrial REITs were off only 0.83% and the 5 Self-Storage REITs were down 5.75%.
When looking at the portfolio composition for Blackstone REIT, we see that the REIT was well-positioned to withstand the impacts on property values brought on by the COVID-19 pandemic. The table below shows that the REIT had relatively heavy concentrations in Warehouse/Distribution assets and Multifamily properties. Even the Q4 2019 acquisitions reveal that the REIT was moving toward those two asset groups prior to the pandemic’s ravaging of property values beginning in March 2020.
When Q2 2020 financial reporting is done, we will see how Blackstone REIT was able to weather the COVID-19 storm in the April through June period when many REITs with concentrations in hospitality and retail assets will be reporting the bad news for those sectors. So far, Blackstone REIT has done relatively well. Investors are voting with their dollars, giving Blackstone REIT a total capital raise in Q1 2020 at a record level of $5.16 billion.
Sources: Blue Vault, NAREIT, SEC and S&P Global Market Intelligence
