Blackstone’s Real Estate Trust Changes President As CRE Markets Crack

Blackstone Inc.’s $68 billion real estate trust has been bombarded with nine months of heavy redemption requests while storm clouds gather over commercial real estate markets. The latest sign of bad news from Blackstone Real Estate Income Trust (BREIT) is an announcement from the company that its president will go on nine months of leave. 

BREIT filed an 8-K filing on Tuesday morning, announcing president A.J. Agarwal “will be taking a continuing education sabbatical beginning September 15, 2023 for nine months, and is stepping down from his role as President and Board member effective August 14, 2023.” 

Agarwal will be replaced by “Robert Harper, BREIT’s current Head of Asset Management and Head of Blackstone Real Estate Asset Management Americas,” the filing said.

The management change comes as BREIT has been working through redemption requests since last November. Wealthy investors have panicked out of the fund but have only been met with redemption restrictions to prevent massive outflows. 

Remember when BREIT received a $4 billion bailout cash infusion from the University of California earlier this year?

Blackstone’s BREIT Gets $4 Billion ‘Buffett-Style’ Bailout From University Of California

Late January, Blackstone President Jonathan Gray told Financial Times that BREIT was experiencing a “backlog” of redemption requests. 

Blackstone President Says BREIT Still Has “Backlog” Of Redemption Requests

Redemption requests surged in Spring:

Blackstone BREIT Redemption Requests Surge To $4.5 Billion, Only $666 Million Granted
Blackstone’s BREIT Suffers Sixth Consecutive Month Of Withdraws As CRE Deteriorates

And continued this summer:

BREIT Hit By Ninth Consecutive Month Of Redemptions; Plans Pivot To AI Data-Centers

BREIT’s troubles stem from shifts in real estate demand and rising interest rates that have caused rumbles in CRE markets. 

Taking a “continuing education sabbatical” is a new one… Typically, executives resign citing ‘health reasons’.