Use Caution With Private REITs Like Blackstone’s BREIT - Is Now a Good Time to Invest in REITs?
Money For the Rest of Us
J. David Stein
4.5 • 1.4K Ratings
🗓️ 14 December 2022
⏱️ 28 minutes
🧾️ Download transcript
Summary
How public equity REITs differ from private REITs. Why investors are selling out of private REITs and why private REIT sponsors like Blackstone and Starwood are limiting investors' ability to do so.
Topics covered include:
- What are public and private real estate investment trusts
- Why has Blackstone's BREIT been such a success
- Why investors are trying to exit private REITs
- Why commercial property values are falling
- Is now a good time to invest in public and private REITs?
For more information on this episode click here.
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Show Notes
Property Insights: Roller Coaster by Michael Knott—Green Street
Related Episodes
183: How To Invest In Commercial Real Estate
230: Use Caution With Real Estate Crowdfunding
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Transcript
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| 0:00.0 | Welcome to Money for the Rest of Us. This is a personal finance show on money. How it |
| 0:05.2 | works, how to invest it, and how to live without worrying about it. I'm your host, David Stein |
| 0:10.8 | today's episode 414. It's titled Use Caution with Private Real Estate Investment Trust. |
| 0:18.9 | Just a quick announcement, this is the last episode of the year we're getting ready to take |
| 0:24.2 | our year and break. We'll return on January 4, 2023 with brand new episode, episode 415. It |
| 0:31.9 | will be a Q&A episode. We'll be answering listener questions. Thank you for listening |
| 0:37.2 | to the show this year for sharing it with your friends for leaving reviews of the podcast |
| 0:43.1 | and just being a part of our community. |
| 0:46.5 | Four years ago, in episode 230 of the podcast, the episode was titled Use Caution with Real |
| 0:52.8 | Estate Crowdfunding. Now to have a follow up episode, a more narrower topic, Use Caution |
| 0:58.7 | with Private Real Estate Investment Trust. But in episode 230, we discussed the Blackstone |
| 1:05.5 | Real Estate Income Trust. The ticker is B-R-E-I-T or B-REAT. At the time, B-REAT had been |
| 1:14.1 | operating for just about two years. We analyzed the fund again in one of our premium podcast |
| 1:19.1 | episodes, plus episode 256. B-REAT is set up as a perpetual private real estate investment |
| 1:27.1 | trust. That means it never matures. Traditionally, institutional investors have invested in private |
| 1:36.1 | real estate transactions, this is offices, shopping centers, apartments. They've done it through |
| 1:42.4 | private funds, typically limited partnership structure. And there's a term of 10 to 12 |
| 1:49.1 | years. But with a private REIT, there is an a term. New investors are coming in and |
| 1:55.3 | that can fund investors that want to leave. Equity REITs, both public and private, are |
| 2:03.2 | what are known as indirect investment vehicles. They're indirect because there's a professional |
| 2:09.7 | money management team selecting the underlying direct investments. The direct investments |
| 2:16.3 | for a public REIT and a private REIT are income-producing commercial real estate, offices building, |
... |
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