Overview of Blackstone Real Estate Income Trust (BREIT)

Blackstone Real Estate Income Trust (BREIT) is a non-listed, perpetual life real estate investment trust (REIT) that invests primarily in stabilized, income-generating commercial real estate in the United States. BREIT also invests, to a lesser extent, in real estate debt.

BREIT is externally managed by BX REIT Advisors L.L.C., which is part of the real estate group of Blackstone, a leading investment manager. As of May 9, 2025, BREIT had received cumulative net proceeds of $77.5 billion from the sale of shares and units to investors.

Q1 2025 Highlights

• Declared monthly net distributions totaling $598.6 million for the three months ended March 31, 2025.
• Raised $0.8 billion from the sale of shares and units during the three months ended March 31, 2025. Repurchased $2.1 billion of shares and units from investors during the same period.
• Increased financings by a net $0.5 billion during the three months ended March 31, 2025.
• As of March 31, 2025, BREIT’s portfolio consisted of 95% investments in real estate and 5% investments in real estate debt.
• BREIT’s 4,568 properties as of March 31, 2025 were primarily concentrated in Rental Housing (47% based on fair value), Industrial (24%), and Data Centers (15%), with a geographic focus on the South (37%), West (29%), and East (20%) regions of the U.S.

Investment Portfolio

BREIT’s investment portfolio is diversified across property types and regions. As of March 31, 2025, the portfolio consisted of:

• Real Estate Investments (95% of total):
  • Rental Housing (47% of real estate investments): Includes multifamily, student, affordable, manufactured, single family rental, and senior living properties.
  • Industrial (24%): Warehouse, distribution, and logistics facilities.
  • Data Centers (15%): Powered shell data center properties.
  • Net Lease (6%): Properties leased to single tenants on a long-term basis.
  • Other property types (8%): Office, hospitality, retail, and self storage.
• Real Estate Debt Investments (5% of total):
  • Diversified portfolio of commercial mortgage-backed securities (CMBS), residential mortgage-backed securities (RMBS), mortgage and mezzanine loans, and other real estate-related debt.

BREIT’s real estate portfolio is primarily concentrated in growth markets in the South and West regions of the U.S.

Financial Performance

For the three months ended March 31, 2025, BREIT reported:

• Total revenues of $2.06 billion, down from $2.19 billion in the prior year period. The decrease was primarily due to lower rental revenue from property dispositions.
• Net loss of $1.84 billion, compared to a net loss of $170.1 million in the prior year period. The increased loss was primarily driven by higher impairment charges, losses from unconsolidated entities, and losses on interest rate derivatives.
• Funds from Operations (FFO) of negative $937.8 million, compared to positive $743.6 million in the prior year period.
• Adjusted Funds from Operations (AFFO) of $339.7 million, compared to $440.5 million in the prior year period.
• Funds Available for Distribution (FAD) of $343.5 million, compared to $413.5 million in the prior year period.

Same Property NOI Analysis

BREIT analyzes its operating performance on a “Same Property” basis, which excludes the impact of acquisitions and dispositions. For the three months ended March 31, 2025:

• Same Property NOI increased 4% year-over-year, driven by:
  • 3% increase in rental revenue, primarily from higher base rents and occupancy.
  • 3% increase in hospitality revenue, primarily from higher occupancy and average daily rates.
  • 3% increase in operating expenses, primarily from higher insurance, real estate taxes, and other costs.

The increase in Same Property NOI demonstrates the underlying strength of BREIT’s portfolio, as it was able to generate higher income from its stabilized properties despite the challenging macroeconomic environment.

Net Asset Value (NAV)

BREIT calculates its NAV monthly to determine the purchase and repurchase price for its shares. As of March 31, 2025, BREIT’s total NAV was $53.3 billion, or $13.81 per share/unit on a blended basis across all share classes.

The key components of BREIT’s NAV calculation are:

• Investments in real estate: $101.0 billion
• Investments in real estate debt: $6.5 billion
• Investments in unconsolidated entities: $13.3 billion
• Mortgage loans, term loans, and revolving credit facilities: $60.9 billion (net)

BREIT’s NAV calculation reflects the fair value of its assets and liabilities, which differs materially from the historical cost-based accounting used in its financial statements.

Outlook and Risks

The recently announced tariffs in the U.S. have contributed to significant uncertainty and volatility in debt and equity markets. This policy-driven uncertainty and market volatility increases the likelihood of a slowdown in the U.S. and global economies, which could impact the commercial real estate market and BREIT’s investments.

However, the tariffs are also likely to increase construction costs and further reduce new supply, which could be supportive of real estate values over time, assuming inflation subsides and the economy avoids a recession.

BREIT faces other risks, including potential impairment charges, losses from unconsolidated entities, and interest rate volatility. The company’s diversified portfolio and conservative leverage position help mitigate these risks, but they remain important factors to monitor.

Overall, BREIT’s Q1 2025 results demonstrate the resilience of its diversified real estate portfolio, though the uncertain macroeconomic environment presents both challenges and opportunities going forward.