In December, BREIT drastically reduced the capital returned to investors requesting redemptions, down to 0.2% of its net asset value. It had already cut the amount returned to investors under its policy. In November, BREIT returned $1.3 billion to investors that asked for redemptions, representing about 43% of the total number of shares, BREIT said in a document filed with the SEC. In October, BREIT fulfilled $1.8 billion in redemption requests, it said.
One gamble for UC Investments is that Blackstone will be able to provide the annual 11.25% annual minimum return over the six-year holding period.
"11.25% is attainable but no slam dunk," Mr. Nesbitt said.
BREIT's leverage ratio was 47% as of Nov. 30, according to a report on BREIT's website.
Real estate managers expect values of private real estate portfolios to fall in 2023.
Over the last 12 months, the drop in public real estate investment trust share prices implied a 15% to 20% reduction in real estate values, said Uma Moriarity, senior investment strategies and global ESG lead at REIT manager CenterSquare Investment Management.
Private REITs are valued like real estate funds, which is by appraisal, and not like publicly traded REITs, which is based on share price, she said.
"The private market is very slow to react to a valuation change like that," Ms. Moriarity said. CenterSquare executives expect private market real estate valuations to fall by around 7% to 8%, she said.
Right now, there are very few transactions that can be used to set valuations because sellers and buyers are at odds on what properties are worth, Ms. Moriarity said. Transaction volume isn't expected to increase until mid-2023, after there is more clarity on interest rates from the Federal Reserve and what properties should be worth, she said. In general, the transactions occurring now are ones that need to happen, Ms. Moriarity said.
Blackstone has $951 billion in assets under management.
UC Investments had assets under management of $152.3 billion as of June 30. UC Investments officials declined to comment, spokesman Stett Holbrook said in an email.