Blackstone Real Estate Investment Trust has come under severe pressure as the COVID-19 panic spreads across ever-greater portions of the United States. Barrons writes that the company has been hit by downturns in public real estate shares and a pair of poor investments in Las Vegas. One of the country’s biggest non-public REIT, it has $34.6bn in total assets, which amounts to $16.4bn in net assets. Set up in 2017, it was still looking like a good bet at the end of last year when it returned 12 percent including dividends and 10 percent since its inception. The fact that it isn’t public means that Blackstone prices BREIT shares on a monthly basis in conjunction with third-party resources, according to Barrons. All eyes are currently on what kind of hit the share prices will take according to the March 31 valuation. “I would expect the NAV to be down, but not a draconian reduction” Kevin Gannon told the magazine. The CEO of Robert Stanger, a New Jersey investment bank, said Blackstone had a lot of capital and a clever management team. “I would expect them to take advantage of weakness and opportunity.”
Clever or not, however, BREIT bought two assets in Las Vegas at what’s being seen as the top of the market: the real estate component of the Bellagio hotel/casino and a share in the real estate of MGM Grand and Mandalay Bay Resorts. The timing on these two recent deals could hardly have been less opportune, given the fact that they’ve been closed by the pandemic.
