Blackstone Group, the private equity firm that oversees $368.2 billion of investments, has taken the lead in targeting mom-and-pop investors with its first nontraded real estate investment trust, according to The Wall Street Journal.
Nontraded REITs are marketed to people seeking investments in the commercial real estate industry.
As of April, Blackstone Real Estate Income Trust Inc. had raised $755.4 million, or about 40 percent of the money raised by nontraded REITs, according to data from investment bank Robert A. Stanger & Co.
Nontraded REITs have faced criticism for charging high fees and providing poor disclosure of risks and fees. Investors complained some traditional nontraded REITs didn’t penalize fund managers for making bad investment decisions. That’s not the case for the Blackstone product.
“If things don’t go well, Blackstone won’t make as much,” Phil Owens, managing director of Green Street Advisors’ consulting unit, told the WSJ. “If things go really well, they make more.”
Green Street historically has recommended that investors buy traded REITs, which are listed on public stock exchanges, because of their better fee structure.
Nontraded REITs were popular used to be popular because of the high dividends they paid when interest rates were near historic lows. But upfront fees that be as much as 15 percent and negative headlines about the collapse of American Realty Capital Partners Inc. damped enthusiasm for the investment products.
Blackstone is marketing its nontraded REIT through major financial groups such as UBS Group AG, Morgan Stanley and Bank of America Corp.’s Merrill Lynch brokerage.
Blackstone this week also disclosed plans to raise $40 billion for an infrastructure fund. Saudi Arabia’s Public Investment Fund agreed to commit $20 billion to the pool, which may have more than $100 billion of purchasing power when adding debt.
Blackstone was co-founded by Steven Schwarzman, who is chairman of President Donald Trump's Strategic and Policy forum made up of business leaders who advise the White House on jobs and growth.
© 2025 Newsmax Finance. All rights reserved.