Green Street



Wall Street Journal: Blackstone is Taking Over Mom-and-Pop Real-Estate Investing

From The Wall Street Journal:

Blackstone Group amassed one of the world’s largest real estate portfolios by pulling in much more capital than competitors from big institutions such as pension funds, insurers and university endowments.

Now it is taking its show to mom-and-pop investors—and again blowing away its competition.


Some traditional nontraded REITs were criticized because managers wouldn’t be penalized for making bad investment decisions. That isn’t the case with the Blackstone REIT.

“If things don’t go well, Blackstone won’t make as much,” said Phil Owens, managing director of Green Street Advisors’ consulting unit. “If things go really well, they make more.”

Green Street has been a critic of nontraded REITs for their high fees, weak disclosure and lack of alignment. Mr. Owens said the Blackstone structure represents “a big shift.”

But Mr. Owens stopped short of backing away from Green Street’s longstanding position that investors are better off buying traded REITs, which are listed on public stock exchanges, than nontraded ones. Green Street has calculated the overhead of the Blackstone REIT will be about twice as much as a “large, blue-chip publicly traded REIT” if it performs as expected.


To read the full article from The Wall Street Journal, click here.