The lesson from Blackstone's Retail Real Estate Fund: Liquidity matters

The recent move from

Black stone

giant retail real estate fund to limit redemptions after too many withdrawal requests is a wake-up call for investors in a once-hot sector that may now face greater regulatory scrutiny.

Blackstone Real Estate Income Trust, known as BREIT, shouldn’t have offered any surprises. The $69 billion BREIT, the leader among non-traded funds, was a way to get solid returns, a solid 4% dividend and the expertise of the world’s best commercial real estate investor. In return, investors sacrificed liquidity – they could withdraw their investments from the non-exchange-traded fund at just 2% of net asset value per month and 5% per quarter. For a long time it worked; the fund has returned 9% this year through October and 13% annually since its inception nearly six years ago.

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