As blog readers will know, the Blackstone Real Estate Investment Trust (BREIT) - to which UC provided a $4.5 billion bailout - has continued to experience a slow motion run, with investors trying to pull more money out than BREIT will give them. Our prior post on this matter noted that BREIT was selling off assets to fund the run.* According to Bloomberg, now more assets have been sold:
Blackstone Inc.’s $68 billion real estate trust agreed to sell Simply Self Storage to Public Storage for $2.2 billion as the property vehicle grapples with investor withdrawals and upheaval in the commercial-property sector. Blackstone Real Estate Income Trust will sell the self-storage business, the companies said Monday in a statement. The deal, expected to close in the third quarter, will result in more than $600 million in profit for BREIT, Blackstone said.
Blackstone built BREIT into a massive player in the real estate industry, attracting investors as it snapped up properties from student housing to data centers across the US. The trust started to come under pressure last year as more investors sought to pull money amid the shift in markets. BREIT has limited withdrawals for eight straight months, although requests eased in June from a month earlier and are down from a peak in January...
Full story at https://www.bloomberg.com/news/articles/2023-07-24/blackstone-to-sell-a-self-storage-business-for-2-2-billion or https://archive.is/t1Ecn#selection-4653.0-4689.129.
As we have also noted, only one Regent on the Investments Committee raised any significant concerns about UC's bailout (which included a "guaranteed" very high return in exchange for UC's funds). Since there appear to be appreciable financial risk involved (and perhaps legal risk), one might have expected more regental curiosity. (Most of the questioning has come in the form of public comments, but these comments focus on landlord-tenant matters at BREIT properties.)
We are not saying that the bailout will turn out to be a bad deal for UC. We are saying that the process involved - which appears to be an initiative of the chief investment officer without other input - and the lack of scrutiny by Regents who are supposed to be trustees of UC funds - raise questions.
===
*http://uclafacultyassociation.blogspot.com/2023/07/blackstone-reit-still-draining-part-5.html.
No comments:
Post a Comment