We help investors recover Blackstone losses. The Blackstone REIT, the BREIT, is known to have multiple problems. Recent misrepresentations, mismanagement and lack of due diligence has caused investors to suffer unnecessary losses. Please contact us if you suffered losses in the Blackstone BREIT, Multi-Strategy Fund, or other Blackstone funds for these or other issues.
Advisors either knew or should have known of the problems with Blackstone for years but continued to sell to investors. These issues made the investment unsuitable for most, if not all, investors. Many turned a blind eye because of the heightened commissions paid for the sale of non-traded REITs like Blackstone – commissions substantially higher than paid for a portfolio of stocks and bonds.
This can be viewed either as a negligent omission or a failure of due diligence. Either way, advisors are responsible when losses occur in such investments.
A Blackstone marketing graphic contained an error concerning its REIT (“BREIT”). This is just one of many problems with this REIT. The graphic promises inflated after-tax yields and tax-equivalent yields. 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. Blackstone blocked or limited redemptions for the ninth consecutive time on August 1, 2023.
BREIT continued to experience issues through the end of 2023. Anticipating its demise in 2023, entities began shorting BREIT. This was due in part to BREIT’s continued efforts to limit liquidation. As of December, 2023, BREIT limited withdrawals for 13 straight months. BREIT announced at the end of 2023 that it suffered the worst loss in its history.
If you are in BREIT and have suffered losses or cannot liquidate your shares, please call for a consultation.
Similarly concerning are the Losses in the Blackstone Multi-Strategy Fund. The assets of this fund dropped nearly 90% from 2019 through 2023. Blackstone is closing this fund.