Blackstone jumps into nontraded REIT market

August 12, 2016



Blackstone jumps into nontraded REIT market

Firm wants to raise $5 billion in first venture, possibly through wirehouses

Aug 10, 2016 @ 12:35 pm | By Bruce Kelly| Investment News

Wall Street alternative investment giant The Blackstone Group, with $356 billion in assets, is diving into the beleaguered nontraded real estate investment trust marketplace, registering its first nontraded REIT with the Securities and Exchange Commission on Wednesday.

The Blackstone Real Estate Income Trust Inc., which will invest primarily in stabilized income-oriented commercial real estate, looks to raise $5 billion from investors, with $1 billion of that in shares of its distribution reinvestment plan, according to its registration filing with the SEC. The REIT’s special limited partner, an affiliate of Blackstone, will receive a fee of 12.5% of the REIT’s total return after meeting a 5% hurdle.

Priced at the industry standard $10 per share, the REIT’s upfront selling commissions on its T shares are 3%; investors will also pay dealer manager fees of 50 basis points and an annual stockholder servicing fee of 85 basis points, which runs a maximum of seven years, according to the SEC filing.

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