A Blackstone marketing graphic contained an error concerning its REIT (“BREIT”). The graphic promises inflated after-tax yields and tax-equivalent yields. Please contact us if you suffered losses in BREIT for these or other issues.
The SLCG Economic Consulting Group identified the error and published its findings in May 2023. Blackstone removed the representation shortly thereafter. The erroneous representation first appeared in October 2022. The graphic reported a 3.7% pre-tax, 3.6% after-tax and 5.7% tax equivalent yield. BREIT claimed a 4.5% after-tax yield and a 7.1% tax-equivalent yield as of March 31, 2023.
The correct after-tax yield as of March 31, 2023 for the I shares was no more than 3.6%, not 4.5% as BREIT claimed and the tax-equivalent yield for the I shares was no more than 5.7%, not 7.1% as BREIT claimed.
BREIT claimed an after-tax yield that ignored the capital gains taxes which, at a minimum, would be due in the future on the distributions which were largely being treated as a return of capital.
BREIT has had numerous issues in the past year. SLCG identified in December 2022 that the Blackstone BREIT was ether going to crash or collapse slowly. This was in response to Blackstone announcing that it would only honor redemption requests of 2% a month and 5% a quarter.
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