Chris Hughes, Columnist

Last Exit from Blackstone?

The company’s within rights to restrict withdrawals from its flagship real estate investment trust. But that doesn’t mean the move won’t sting.

December 2, 2022 at 2:32 PM UTC

By Chris Hughes

Chris Hughes is a Bloomberg Opinion columnist covering deals. Previously, he worked for Reuters Breakingviews, the Financial Times and the Independent newspaper.

Blackstone headquarters in New York City.
Photographer: Angus Mordant/Bloomberg

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Sometimes doing what you warned you’d do will still upset your customers. Blackstone Inc. faces a reputational challenge after restricting withdrawals from its flagship retail investment property vehicle due to a recent spike in redemption requests. The unlisted BREIT real estate investment trust is an innovative and high-profile engine of growth for the US private equity firm. Disappointments have consequences for Blackstone and the sector.

Shares in Blackstone fell 7% on Thursday after demands from BREIT investors for their money back exceeded the quarterly limit, prompting Blackstone to temporarily close the exits. BREIT investors should have been fully cognizant of the risks. The snag is that the feeling of being trapped may make them more keen to seize the next opportunity to get out and potentially prompt others to join the queue as a precaution.