Blackstone’s real estate fund delivers 8.1% annual gain

Blackstone’s Real Estate Income Trust, the largest nontraded real‑estate fund for individual investors, delivered a strong rebound in 2025, marking its best performance in three years. 

The fund, known as Breit, posted an 8.1 percent total return and closed the year with more than $54 billion in assets, a sharp improvement from its 2 percent gain in 2024 and a 0.5 percent loss in 2023, The Wall Street Journal reported. The primary driver of this resurgence was its sizable exposure to data centers, particularly its stake in QTS, one of the world’s largest operators in the sector. 

Since parent Blackstone acquired QTS in 2021 through Breit and two other affiliated funds, the company’s value has surged amid explosive demand from artificial intelligence and cloud‑computing companies. In August, QTS raised $1.65 billion in fresh capital for data center deals.

Breit’s 2025 performance represents a notable change from the turbulence of late 2022 and 2023, when rising interest rates and falling commercial‑property values triggered heavy investor redemptions. Like other nontraded REITs, Breit was forced to limit withdrawals as investors shifted capital into high‑yielding money‑market funds. 

Starwood’s fund, Sreit, and other retail‑focused real‑estate funds faced similar pressures, with some imposing even stricter redemption caps.

By early 2024, however, Breit had resumed meeting all redemption requests. 

“Real estate hit bottom last June and has been in recovery ever since,” Kevin Gannon, CEO of Robert A. Stanger & Company, an alternative investment consultancy, told the Journal.

Nontraded REITs resemble publicly traded REITs in their underlying assets — apartments, warehouses, and other commercial properties — but differ in that their shares do not trade on public exchanges. Sponsors argue that this structure protects investors from market volatility, though the recent downturn highlighted a key vulnerability: Investors can face delays or limits when attempting to redeem shares in a down market.

Across the industry, returns in 2025 were far weaker than Breit’s. Excluding Blackstone’s fund, nontraded REITs averaged roughly 1.5 percent gains through the third quarter. Many peers were weighed down by exposure to sectors more sensitive to high interest rates, while Breit benefited from having 21 percent of its portfolio in data centers, one of the strongest performing property types.

Breit also outperformed public REITs, which returned about 2.3 percent in 2025, though both lagged the S&P 500’s 17.9 percent surge. The fund also faced internal turbulence, naming new CEO Katie Keenan after the previous top executive Wesley LePatner was killed at Blackstone’s New York City headquarters.

– Joel Russell