The recent surges in withdrawal requests at Starwood and Blackstone, and the decisions by both to limit redemptions, may be signs less of an issue the non-traded REITs faced and more of a deeper problem. Rather than a pair of curiosities, they might represent the surfacing of a previously invisible developing systemic issue.

Blackstone CEO Stephen Schwarzman spoke about the situation this week, according to the Financial Times. “’The idea that there is something going wrong with this product because people are redeeming is conflating completely incorrect assumptions,’ Schwarzman said at an industry conference. ‘This was not meant to be a mutual fund with daily liquidity. These are pieces of real estate.’”

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Erik Sherman



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