The outlook is BREIT says BREIT

From time to time, we look in at the Blackstone Real Estate Investment Trust (BREIT) in which UC invested $4.5 billion in a kind of bailout during a slow-motion run on the bank. UC was supposed to get a guaranteed super-normal return. In an earlier post, we noted that this extra return was somehow being put on a tab rather than immediately paid out. Only one Regent asked if maybe this was an overly-risky deal.

It appears now that BREIT is able to handle the remains of the run, i.e., net withdrawals which continue, without rationing. But withdrawals continue. From the Wall St. Journal:

For signs that the turbulent commercial real-estate market is beginning to stabilize, look at Blackstone’s largest real-estate fund, known as Breit. The firm was able to fulfill all investor redemption requests in February and March for the first time since late 2022, when a flurry of withdrawals compelled it to limit how much it could pay out. “We believe commercial real estate is at an inflection point, with real estate values bottoming,” Blackstone said in an April letter to Breit shareholders, who are mostly individual investors.

But that is only part of the story. Breit fundraising hasn’t returned to its previous robust levels. Investor withdrawals continue to greatly exceed new cash coming in, a sign of lingering worries about the backdrop for commercial properties. Financial advisers who work with individual investors say most of their clients remain wary of commercial real estate, citing recent turbulence in the market and the latest signals from the Federal Reserve that it might not cut interest rates this year. Investors also fret over rising default levels and over supply that is putting downward pressure on apartment rents in some markets...

Full story at https://www.wsj.com/real-estate/commercial/blackstone-breit-real-estate-fund-investor-redemptions-544ac28c.