Angst over the long-term viability of the commercial property market prompted Blackstone to limit withdrawals from its unlisted real estate income trust after a surge in redemption requests, multiple outlets have reported.
According to Reuters, the curbs came because redemptions hit pre-set limits, rather than Blackstone setting the limits on the day. The REIT makes up around 17% of Blackstone's earnings, Reuters said.
The news comes amid higher and forecasted to grow interest rates, which make the cost of debt higher, resulting in properties being more expensive to finance.
Alex Snyder, a portfolio manager at CenterSquare Investment Management LLC in Philadelphia, told Reuters that the arbitrage between the value Blackstone has assigned to its real estate portfolio and the value of publicly traded REITs caught the eye of investors.
"People are taking profits at the value Blackstone says their REIT shares are at," he said.
The REIT, which has a large concentration of rental housing and logistics assets, is marketed to wealthy individual investors. Sources told Reuters that the majority of investor redemptions were from Asia, where economic and political turmoil has prompted many to be more liquid.
Blackstone told investors in a letter it would curb withdrawals from its REIT after it received redemption requests in November greater than 2% of its monthly net asset value and 5% of its quarterly net asset value.
The news comes on the heels of the REIT's sale of its stake in the Mandalay Bay and MGM Grand in Las Vegas.
The fund, after accounting for debt, owns $69 billions in assets.