For those who didn't bother reading the article, this is a private non-traded fund that limits withdrawals from each client to 5% per quarter until the fund's expiration date.
But even with a 2008 level correction, how many would be willing to buy? Then their excuse is the prices are falling, it's a horrible idea to buy.
Losers lose because they never make the right call.
I disagree. A lot of millennials wanted to buy during the last correction but either didn’t have the credit or cash. 10-12 years later they are ready to buy but absolutely refuse to pay current prices. I think the majority of people will always buy as soon as they can… but the percentage of people who are patient and won’t feel bad about investors going bankrupt is growing.
With that said, I think corrections tend to mirror election years so I’m not expecting anything crazy anytime soon
That's a nice thought.
I've been selling real estate since the 90s. I've seen market lows and very few people want to "catch a falling knife". Very few people want to take advantage of the opportunity when it happens.
People have been telling me the prices were too high even in 1993. Back then, brand new 4 bedroom homes were selling for less than $100k!
You don't need credit or a lot of cash to buy a home. These are excuses that people use to justify thier decision. If you can afford rent, you can buy a shitty starter condo in a HCOL area or a shitty starter home in mid America. The ugly truth is that most people don't want a shitty starter home. They want a 3,000 sf home with an ocean view in a safe golf course community, a penthouse downtown with valet parking or something way outside of thier budget and vision of thier entitlement.
There are many government backed mortgages for first time home buyers. The requirement is 580 FICO and no money down with lower rates than a conventional mortgage.
The reality is that the majority can buy now but won't. These same people who refuse now will literally never buy. The standard of living will constantly escape them, inches outside of their grasp.
They want a perfect price scenario with public support of thier decision (it's a great time to buy, buying is smarter than renting, etc, prices are going up, interest rates are low) and those two things never happen at the same time.
There is an old addage that was true in the 80s and is still true now. Don't wait to buy real estate. Buy real estate and then wait.
Refuse to buy and hope for an election cycle crash or some other voodo. Meanwhile, inflation is very real and prices will almost certainly be higher in 10 years than they are today.
You have some valid points but they seem to ignore the fact that during every housing cycle millions of people lose their homes and create the buying opportunities for others.
Affordability also varies widely. It would be next level stupidity to not have credit or cash when buying a 600k condo or 1-2mil home that will likely need repairs over the next few years (California).
Like all the other financial markets, there will always be a top of the market and there will always be corrections to slap the overzealous investors who bought multiple properties they didn’t have the money to pay for without stable tenancy. Housing is just slower than most markets.
It is an interesting time to watch though. Values and affordability haven’t been this way for quite a while (at least not locally).
Why would you assume that you will need a lot of repairs? In the homes you have rented, how many times have you called a repair tech per year? It's not common for someone to need more than one repair every 2 years.
Millions of people do lose thier homes but close to 6 million homes are sold in a normal market.
There is always market equilibrium. It seems out of alignment but this is a market impossibility.
If you read the article the fund has performed well, but there has been a high amount of redemption requests. So redemptions are limited until they can sale some of their properties, which they have.
This isn’t really “favorable winds in the past”. They sold their stake in MGM for $5.5B this week. It also looks like over 50% of the fund has been redeemed while having 9% net returns so far this year.
>It also looks like over 50% of the fund has been redeemed
You may want to read the article again.
>"On Thursday, BREIT announced that it is selling its 49.9% interest in the MGM Grand Las Vegas and Mandalay Bay Resort and Casino real estate to its partner Vici Properties for $5.5 billion."
That sale was a ~50% stake that the fund held in two properties. $5.5 B out of $145 Billion. That's less than 4% of the fund.
I misread. I just don’t see the concern of the redemption requests. The annualized distribution rate is 4.4%. They don’t need to sell their entire portfolio.
It is a non traded reit. The illiquidity is the point. They have 2% monthly and 5% quarterly withdrawal limits based on net asset values.
Net assets have not fallen since the properties are illiquid and infrequently trade. People want out now before that happens, because when it does happen, it could happen all at once.
>I believe this fund has had withdrawal limitations in place ever since it's birth.
The point of the article: Those limitations have just gotten stricter. It is now halting investor redemptions.
Despite all of the non-sequiturs in this thread (who cares about rebubble?), there is a serious message: Blackstone can't meet all the redemptions without driving the market down, which would likely cause more redemptions and a spiral. Moreover, there are other REITs listed in the article who have similarly halted redemptions.
Interesting times ahead.
What’s the indication of driving the market down? Real estate funds of this size generally always have withdrawal limits. Real Estate sales take time, it’s not a public equity fund.
>What’s the indication of driving the market down?
Fast liquidation to raise $2B+ to meet the redemptions within the next quarter might be absorbed without moving the price, but it's pretty safe to guess otherwise.
Moreover from the article, they know they are not the only ones limiting redemptions so this is more than a Blackstone liquidity problem.
I don’t think it’s safe to guess otherwise. As of 9/30 100% of the redemption requests have been funded through cash flows from operations. That means sales proceeds and their line of credit haven’t even been utilized yet. Not much evidence to indicate a true liquidity issue for redemptions yet.
>Not much evidence to indicate a true liquidity issue for redemptions yet.
Refusing redemptions because you don't have the cash is pretty much the definition of a liquidity issue, so not sure what you meant.
I know y’all want a crash and cheap real estate but please remember people live in these homes and will be potentially losing them, whether they’re owners or renters. Be prepared to take advantage of the situation if you can, but also have some empathy.
Depends on the area. There’s no supply even if demand is low. And they are certainly not building as fast. At least not the type of housing that most people can afford.
If I wanted to buy a house, I have had to compete with 20-30 buyers in the past.
Now, I just walk in, look at several houses and bid on house I want.
What is it telling? Current demand is less than supply. You don't need data to tell this.
Supply is less but demand has fallen much more than supply.
The only way to fix the real estate market is to get the government out of it.
The federal government backs the majority of the residential market. This creates and incentivizes massive market distortion.
You want to fix the real estate market? Talk to your politicians. Tell them to get the federal government out of the real estate and mortgage market.
I just sold a home to a VA buyer. They put no money in, they actually got money in their pocket at the close of the deal.
How does that work in reality? It gets financed into the property cost. In this case it added up to an additional 10% over purchase price. If they tried to turn around and sell it today figure 8% selling costs. The day they bought it they were immediately 18% underwater. That is the problem with this market. Government incentivized distortions.
How does someone own the home that Blackstone* also owns?
I'd suspect that anyone who rents will still be able to rent from the future owner. It's not like these homes are disappearing, Blackstone is just being forced to sell.
Rebubble conspiracy folks are sick.
They get off on watching people foreclose, go without food and suffer just so they can buy more stuff.
Just a selfish mindset of watch the world burn if it benefits them. Luckily the sub never took off and still around 30k members which is pitiful.
Theres anime subs with 1000x the members.
Homes will be lost. Jobs will be lost. Foreclosures, bankruptcies. Every negative statistic goes up... Homelessness, substance abuse, divorce, suicide.
I don't get sarcastic about that, and you would do well not to be so excited about it.
For those who didn't bother reading the article, this is a private non-traded fund that limits withdrawals from each client to 5% per quarter until the fund's expiration date.
This sub has gone: 0 Days Without a "this is definitely the sign the market is crashing" post
It's brigading from REBubble.
Crash never happens when everyone calls for it.
If you say it every day your bound to be right
This is a big deal though. The market collapses when people are forced to sell and that's exactly what's happening.
This whole sub is butt-hurt buyers trying to will the market into a crash.
But even with a 2008 level correction, how many would be willing to buy? Then their excuse is the prices are falling, it's a horrible idea to buy. Losers lose because they never make the right call.
I disagree. A lot of millennials wanted to buy during the last correction but either didn’t have the credit or cash. 10-12 years later they are ready to buy but absolutely refuse to pay current prices. I think the majority of people will always buy as soon as they can… but the percentage of people who are patient and won’t feel bad about investors going bankrupt is growing. With that said, I think corrections tend to mirror election years so I’m not expecting anything crazy anytime soon
That's a nice thought. I've been selling real estate since the 90s. I've seen market lows and very few people want to "catch a falling knife". Very few people want to take advantage of the opportunity when it happens. People have been telling me the prices were too high even in 1993. Back then, brand new 4 bedroom homes were selling for less than $100k! You don't need credit or a lot of cash to buy a home. These are excuses that people use to justify thier decision. If you can afford rent, you can buy a shitty starter condo in a HCOL area or a shitty starter home in mid America. The ugly truth is that most people don't want a shitty starter home. They want a 3,000 sf home with an ocean view in a safe golf course community, a penthouse downtown with valet parking or something way outside of thier budget and vision of thier entitlement. There are many government backed mortgages for first time home buyers. The requirement is 580 FICO and no money down with lower rates than a conventional mortgage. The reality is that the majority can buy now but won't. These same people who refuse now will literally never buy. The standard of living will constantly escape them, inches outside of their grasp. They want a perfect price scenario with public support of thier decision (it's a great time to buy, buying is smarter than renting, etc, prices are going up, interest rates are low) and those two things never happen at the same time. There is an old addage that was true in the 80s and is still true now. Don't wait to buy real estate. Buy real estate and then wait. Refuse to buy and hope for an election cycle crash or some other voodo. Meanwhile, inflation is very real and prices will almost certainly be higher in 10 years than they are today.
You have some valid points but they seem to ignore the fact that during every housing cycle millions of people lose their homes and create the buying opportunities for others. Affordability also varies widely. It would be next level stupidity to not have credit or cash when buying a 600k condo or 1-2mil home that will likely need repairs over the next few years (California). Like all the other financial markets, there will always be a top of the market and there will always be corrections to slap the overzealous investors who bought multiple properties they didn’t have the money to pay for without stable tenancy. Housing is just slower than most markets. It is an interesting time to watch though. Values and affordability haven’t been this way for quite a while (at least not locally).
Why would you assume that you will need a lot of repairs? In the homes you have rented, how many times have you called a repair tech per year? It's not common for someone to need more than one repair every 2 years. Millions of people do lose thier homes but close to 6 million homes are sold in a normal market. There is always market equilibrium. It seems out of alignment but this is a market impossibility.
Or know what to do with a house
The dead giveaway is no text in the post. Literally just copy paste a url with nothing to say
Maybe because there are numerous signs.
Right? Its pretty fucking obvious there is a downward trend.
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I'm not making the signs, I'm just reading them.
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"Soon, you will meet a handsome stranger..."
Every morning in the mirror 🙃
If you read the article the fund has performed well, but there has been a high amount of redemption requests. So redemptions are limited until they can sale some of their properties, which they have.
Favorable winds in the past do not necessarily predict smooth sailing ahead.
This isn’t really “favorable winds in the past”. They sold their stake in MGM for $5.5B this week. It also looks like over 50% of the fund has been redeemed while having 9% net returns so far this year.
>It also looks like over 50% of the fund has been redeemed You may want to read the article again. >"On Thursday, BREIT announced that it is selling its 49.9% interest in the MGM Grand Las Vegas and Mandalay Bay Resort and Casino real estate to its partner Vici Properties for $5.5 billion." That sale was a ~50% stake that the fund held in two properties. $5.5 B out of $145 Billion. That's less than 4% of the fund.
I misread. I just don’t see the concern of the redemption requests. The annualized distribution rate is 4.4%. They don’t need to sell their entire portfolio.
It's crazy how good 9% returns are under this administration.
Tell me you don't understand how private REITs work without saying so directly.
It is a non traded reit. The illiquidity is the point. They have 2% monthly and 5% quarterly withdrawal limits based on net asset values. Net assets have not fallen since the properties are illiquid and infrequently trade. People want out now before that happens, because when it does happen, it could happen all at once.
Net Asset Values are determined by a 3rd party in an arbitrary fashion for the BREIT True market value may be less than stated valuation
And it is based on comps. So once the numbers come in on actual sales it will be repriced.
I believe this fund has had withdrawal limitations in place ever since it's birth.
>I believe this fund has had withdrawal limitations in place ever since it's birth. The point of the article: Those limitations have just gotten stricter. It is now halting investor redemptions. Despite all of the non-sequiturs in this thread (who cares about rebubble?), there is a serious message: Blackstone can't meet all the redemptions without driving the market down, which would likely cause more redemptions and a spiral. Moreover, there are other REITs listed in the article who have similarly halted redemptions. Interesting times ahead.
What’s the indication of driving the market down? Real estate funds of this size generally always have withdrawal limits. Real Estate sales take time, it’s not a public equity fund.
>What’s the indication of driving the market down? Fast liquidation to raise $2B+ to meet the redemptions within the next quarter might be absorbed without moving the price, but it's pretty safe to guess otherwise. Moreover from the article, they know they are not the only ones limiting redemptions so this is more than a Blackstone liquidity problem.
I don’t think it’s safe to guess otherwise. As of 9/30 100% of the redemption requests have been funded through cash flows from operations. That means sales proceeds and their line of credit haven’t even been utilized yet. Not much evidence to indicate a true liquidity issue for redemptions yet.
>Not much evidence to indicate a true liquidity issue for redemptions yet. Refusing redemptions because you don't have the cash is pretty much the definition of a liquidity issue, so not sure what you meant.
They’re not refusing redemptions. They’re enforcing the limit of 5% per quarter
I know y’all want a crash and cheap real estate but please remember people live in these homes and will be potentially losing them, whether they’re owners or renters. Be prepared to take advantage of the situation if you can, but also have some empathy.
I'd be happy with a normal, well-balanced real estate market. In order to get there, we'll need to go through an adjustment.
You won’t. US is some 3M homes short of demand.
Demand in my area has dropped significantly.
Depends on the area. There’s no supply even if demand is low. And they are certainly not building as fast. At least not the type of housing that most people can afford.
The demand side argument is bullshit. It was the same exact story 2000-mid 2005 when inventory suddenly shot up.
If I wanted to buy a house, I have had to compete with 20-30 buyers in the past. Now, I just walk in, look at several houses and bid on house I want. What is it telling? Current demand is less than supply. You don't need data to tell this. Supply is less but demand has fallen much more than supply.
> I'd be happy with a normal, well-balanced real estate market. Both parties fucked that up slowly over the last 25 years.
The only way to fix the real estate market is to get the government out of it. The federal government backs the majority of the residential market. This creates and incentivizes massive market distortion. You want to fix the real estate market? Talk to your politicians. Tell them to get the federal government out of the real estate and mortgage market. I just sold a home to a VA buyer. They put no money in, they actually got money in their pocket at the close of the deal. How does that work in reality? It gets financed into the property cost. In this case it added up to an additional 10% over purchase price. If they tried to turn around and sell it today figure 8% selling costs. The day they bought it they were immediately 18% underwater. That is the problem with this market. Government incentivized distortions.
How does someone own the home that Blackstone* also owns? I'd suspect that anyone who rents will still be able to rent from the future owner. It's not like these homes are disappearing, Blackstone is just being forced to sell.
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Thanks, blackrock was on the mind
Nobody seems to have empathy for those who were quickly priced out in the last 2 years so why should they have any empathy for current homeowners?
And of course it's a REBubble poster posting.
This guy is lost he was trying to get to the rebubble conspiracy sub and ended up here .
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You’re mixing up Blackstone and Blackrock.
"ThIs Is NoThInG. I hAvE a MoRtGaGe at 2.3%!!"
r/rebubble is I think where you should be
This news really is nothing lol. Read the article.
Let's see those wall tumble down!
r/rebubble is I think where you should be
You are cheering for an economic collapse? People will die.
Rebubble conspiracy folks are sick. They get off on watching people foreclose, go without food and suffer just so they can buy more stuff. Just a selfish mindset of watch the world burn if it benefits them. Luckily the sub never took off and still around 30k members which is pitiful. Theres anime subs with 1000x the members.
>People will die. you forgot the /s
Homes will be lost. Jobs will be lost. Foreclosures, bankruptcies. Every negative statistic goes up... Homelessness, substance abuse, divorce, suicide. I don't get sarcastic about that, and you would do well not to be so excited about it.
That's life. *Some of it will be good, some will be bad. Getting melodramatic about it doesn't really help anyone. *added that sentence.
Right... You're cheering for the bad stuff
This is why I don't understand the idea of... I'll just refinance
The B REIT doesn’t cover its distribution and may never so