Stanger Reaffirms BREIT Overweight Rating, $23B Returned

Stanger reaffirmed its overweight rating for BREIT, highlighting the $23 billion returned to shareholders and the strong performance of its diversified real estate portfolio.

September 16, 2024

Investment banking firm Robert A. Stanger & Co. has reaffirmed its overweight rating on Blackstone Real Estate Income Trust Inc. (BREIT), citing its robust performance and the return of nearly $23 billion in capital to shareholders since Q4 2022. With $144 billion in total assets, BREIT remains the largest net asset value (NAV) real estate investment trust, with 85% of its portfolio concentrated in residential, industrial, and data center properties.

BREIT's investment in QTS Data Centers, which makes up 9.3% of its real estate value, has proven lucrative. Acquired in 2021 for $10 billion, QTS has since tripled in size, and BREIT’s 33.5% stake is now valued at more than 10% above the initial purchase price. The data center operator benefits from high demand and a strong development pipeline worth $22 billion, along with a $60 billion land bank.

BREIT's residential and industrial properties, primarily located in Sunbelt markets, were 94% occupied as of mid-2024. Its industrial assets, with a short 3.8-year average lease term, offer significant rent growth potential, with recent leases seeing a 42% rent increase. Meanwhile, the residential sector is expected to recover from new supply absorption, with rent growth anticipated to accelerate by 2026.

In recent transactions, BREIT sold an 11-property apartment portfolio for $964 million and a student housing portfolio for $1.64 billion. Despite facing liquidity challenges due to interest rate hikes, BREIT has consistently met repurchase requests since February 2024, returning substantial capital to shareholders without reducing repurchase capacity.

Robert A. Stanger & Co., established in 1978, specializes in investment banking and advisory services for real estate investment trusts, partnerships, and real estate management companies.