BREIT Sells $7B of Non-Core Assets, Shifts Capital to QTS Data Centers

Blackstone Real Estate Income Trust Inc. recorded its second consecutive quarter of positive net flows in the third quarter, with year-to-date subscriptions up about 40% from a year earlier, the nontraded real estate investment trust said in a quarterly update to stockholders released Nov. 4.

The fund, known as BREIT, said third-quarter net flows were its strongest since 2022. BREIT said the second quarter, which began the streak, was its first quarter of positive net flows in nearly four years. BREIT calculates net flows as subscriptions minus gross repurchase requests under its share repurchase plan, including distribution reinvestment and operating partnership units and excluding subscriptions from UC Investments, the University of California’s investment office. The company did not disclose a dollar figure for the quarter’s net flows.

The update follows Blackstone’s Oct. 22 earnings call, when executives said BREIT posted its best regular-way net flows in four years and reported $1.3 billion raised for the fund in the third quarter, including proceeds from its Delaware statutory trust program, as AltsWire reported.

BREIT’s Class I shares returned 2% in the third quarter, 7.3% year to date and 10.7% over the trailing 12 months, the company said. Net returns for the quarter were 1.8% for Class S, S-2, T, and T-2 shares and 1.9% for Class D and D-2 shares, excluding sales loads. BREIT said it has recorded 21 consecutive months of positive performance.

Since its January 2017 inception, Class I has produced a 9.3% annualized net return, compared with 6.0% for the MSCI U.S. REIT Index over the same period, according to the company. BREIT reported a 4.5% annualized distribution rate for Class I and said 100% of its 2025 distributions were classified as return of capital.

Non-Core Sale Proceeds Flow to Data Centers

BREIT said it has sold about $7 billion of non-core assets so far in 2026, including its remaining self-storage and manufactured housing portfolios, and redeployed the proceeds into data centers and industrial properties. The figure reflects gross sales prices and includes dispositions under non-refundable contract. The fund completed its self-storage exit in the second quarter, selling its last 79 properties for $852.3 million in net proceeds.

The fund deployed $3.4 billion into pre-leased data center developments through QTS in the third quarter, bringing its year-to-date total to $9.1 billion. BREIT’s QTS investment accounted for 29.0% of its real estate asset value as of Sept. 30, up from 22.5% as of March 31, the company said. That exceeds BREIT’s industrial and multifamily allocations, at 20% and 17% of real estate asset value, respectively.

BREIT owned 34.8% of QTS as of Sept. 30. BREIT and other Blackstone-managed vehicles acquired the data center company through a joint venture in 2021.

QTS’s leasing roughly doubled year over year in the third quarter, and its $30 billion development pipeline is pre-leased, in substantially all cases, to investment-grade technology companies on leases of 15 years or longer, BREIT said. Those figures reflect QTS at 100% ownership.

“We are not investing in chips or servers,” BREIT said, describing its exposure as the physical facilities rather than the equipment inside them. The fund also said the investments remain subject to risks including technology changes, tenant concentration, power availability, and development risk.

Industrial Leasing Up, Multifamily Turning

BREIT said industrial leasing was up about 80% year over year through Sept. 30, with new and renewal leases signed at rents 31% above prior levels on average.

In multifamily, trailing four-week leasing spreads on BREIT’s apartment portfolio stood at 1% as of Sept. 20, compared with negative 2% a year earlier, according to the company.

The update also cited fundraising from Blackstone Real Estate Exchange, or BXREX, the 1031 DST exchange program that BREIT launched in fall 2025. In September, Blackstone fully subscribed its first BXREX offering, a $175.6 million DST holding two Sunbelt multifamily properties, and had a second, $187.3 million industrial offering in market.

The results come as the 10-year Treasury yield rose more than 100 basis points over the 12 months ended Sept. 30, to 5.3% from 4.2%, according to the update. Blackstone raised valuation cap rates across its real estate holdings in the third quarter in response to higher base rates, executives said on the October call.

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