Added to YB: 2024-04-25
Pitch date: 2024-04-24
BSTT [bearish]
Blackstone Real Estate Income Trust, Inc.
Author Info
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Company Info
Blackstone Real Estate Income Trust, Inc. (“BREIT” or the “Company”) invests primarily in stabilized, income-generating commercial real estate in the United States and, to a lesser extent, outside the United States.
Market Cap
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Pitch Price
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Dividend
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EV/EBITDA
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EV/Sales
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Sector
Diversified REITs
Category
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BREIT: Blackstone’s Bonfire of the Bagholders
BREIT faces scrutiny as red flags emerge: Despite its $59B NAV, it lags behind peers in cash flow, struggles to fully pay its 4.7% distribution in cash, resorting to stock instead, and pays out 150-300% of FCF compared to peers at 75%. With outflows of $10.7B in 2022 and a leverage exceeding 57%, expected to rise as the trust shrinks, concerns about overvaluation arise, especially with an FFO multiple of 28x versus the REITs average of 14x. Properties perform similarly to peers but fail to justify premiums, and unfavorable comparisons to competitors like Bluerock raise additional doubts. Complex accounting practices obscure weak cash flows and asset sales, contributing to heavy redemptions as rate hikes diminish BREIT's appeal, while the high leverage amplifies risks for remaining holders.
Read full article (18 min)