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Blackstone’s BREIT Bounces Back With 8.1% Return in 2025

Blackstone’s BREIT Bounces Back With 8.1% Return in 2025

Data centers delivered big for BREIT, driving its 2025 return to 8.1% and signaling a shift in CRE momentum.

Nina Dale
January 16, 2026

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Good morning. Blackstone’s flagship real estate fund just delivered its strongest performance since 2022, bouncing back from a rough stretch. A strategic bet on data centers proved to be the game-changer.

Today’s issue is sponsored by Arbor Realty Trust—helping investors scale faster with custom multifamily, SFR, and bridge financing since 1993.

🎙️Don’t miss an inside look at the institutional mindset. Bridge Investment Group’s Colin Apple breaks down multifamily underwriting, risk, and the next cycle.

CRE Trivia 🧠

Which U.S. metro area ranked as the most livable place in 2026 based on factors like quality of life, community, and affordability?

(Answer at the bottom of the newsletter)

Market Snapshot

S&P 500

GSPC

6,944.47

Pct Chg:
+0.26%

FTSE NAREIT

FNER

777.75

Pct Chg:
+0.55%

10Y Treasury

TNX

4.171%

Pct Chg:
+0.031

SOFR

30-DAY AVERAGE

3.70%

Pct Chg:
-0.00

*Data as of 1/15/2026 market close.

Fund Revival

How Data Centers Helped Revive Blackstone’s BREIT

Source: Bloomberg

A big bet on data centers helped Blackstone’s flagship real estate fund rebound from recent sluggish years with its strongest return since 2022.

Data centers drive gains: Blackstone’s BREIT returned 8.1% in 2025—its best in three years—driven by rising demand for AI and cloud infrastructure. The $54B fund gained from its stake in QTS, a major data center operator acquired in 2021.

A sharp turn: The 2025 results mark a clear turnaround from BREIT’s weaker showing—just 2% in 2024 and a 0.5% drop in 2023. Amid falling valuations and rising rates, the fund had to limit withdrawals in late 2022 and 2023 due to heavy redemptions.

Investor confidence returns: Since meeting all withdrawal requests in early 2024, BREIT has regained investor trust. It now stands out in a sector where peers like Starwood’s SREIT face redemption limits and weak returns—nontraded REITs averaged just 1.5% through Q3 2025, per Stanger & Co.

Comparing the competition: BREIT outperformed both nontraded peers and public REITs, which returned 2.3% in 2025. Still, it trailed the S&P 500’s 17.9% gain, signaling real estate is stabilizing but not yet fully recovered.

Slow recovery: Despite the rebound, fundraising remains slow compared to BREIT’s $34B peak in 2021. Still, its 2025 performance may help revive investor interest as appetite gradually returns.

➥ THE TAKEAWAY

Data centers deliver: Once weighed down by rising rates, the sector is regaining footing, and BREIT’s performance highlights the strength of niche plays like data centers. For investors, tech infrastructure may be the new prime location.

TOGETHER WITH ARBOR REALTY TRUST

Growing Financial Partnerships Since 1993

Arbor Realty Trust, a relationship-first, direct lender and loan servicer, develops custom multifamily, single-family rental, and bridge loan programs for commercial real estate investors. Our team stands ready to serve you throughout the life of your loan, from construction to bridge to permanent financing.

Enjoy Arbor’s competitive terms, responsive underwriting, and expert servicing from a team that’s financed billions since 1993.

*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.

✍️ Editor’s Picks

All-in-one investor portal: Run the full investor lifecycle in one place, from onboarding with built-in funding and compliance to waterfall calculations, integrated distributions, and LP reporting. (sponsored)
Billionaire frontier: Stan Kroenke became the largest landowner in America after acquiring 937,000 acres of New Mexico ranchland, bringing his total holdings to over 2.6M acres.
Momentum holds: LightBox’s CRE Index dipped in December but remained well above last year, signaling stable deal flow and a stronger start to 2026.
Revenue squeeze: Rate cuts are helping loan demand rebound, but banks like Wells Fargo and Bank of America are seeing reduced revenue from floating-rate commercial property loans.
Investor appetite: Closed-end funds hit $237B in net assets for 2025, fueled by record fundraising and strong investor demand for private credit.
Inflation watch: The Trump administration’s mortgage stimulus and Fed rate cuts are raising fears of inflation as government-driven liquidity floods back into the financial system.
Generation gap: Economist Ed Yardeni says age now divides the economy, with wealthy boomers driving spending as younger Americans face rising debt and weak job prospects.

🏘️ MULTIFAMILY

Vacancy peak: U.S. rents rose just 0.6% in 2025 as vacancies hit a record 8.5%, driven by sluggish lease-ups and an oversupply of luxury units.
Leased living: BTR homes are booming as high mortgage costs and a record affordability gap push more renters toward single-family living without ownership.
Safe havens: Nearly half of U.S. homeowners are considering relocating in 2026 due to rising insurance costs and climate-related risks.

🏭 Industrial

Adaptive advantage: Adaptive reuse now makes up 10% of U.S. self storage inventory, with recent conversions booming in the Sunbelt and Northeast.
Data debt: DataBank aims to raise $665M by securitizing 36 multitenant data centers, an uncommon, large-scale move in the fast-growing data center ABS market.
Atlanta acquisition: Link Logistics acquired a three-building Atlanta industrial portfolio for $54M.
Cold storage: Blackstone is backing a $475M, 1M-SF automated distribution center in Burlington, NC, for Ahold Delhaize’s Food Lion brand under a long-term lease.

🏬 RETAIL

Zoning bottleneck: New York’s push for universal childcare is hitting a real estate wall, as zoning limits, high rents, and lack of site data slow expansion.
Experience sells: Retailers like Starbucks and LEGO are boosting revenue and brand value by blending real estate strategy with immersive customer experiences.
It's always Friday: After bankruptcy and mass closures, TGI Fridays is plotting a comeback with plans to open 600+ new locations and hit $2B in revenue by 2030.
Debt play: Apollo Global Management scooped up $218M in debt tied to the retail condo at Manhattan’s St. Regis Hotel.

🏢 OFFICE

Wynwood power play: Ken Griffin is teaming up with Goldman Properties to acquire the 545wyn office building in Miami's artsy Wynwood district for $180M.
Silent transfer: AIMCO’s $520M Brickell deal dodged deed taxes by skipping a public filing, making it one of Miami’s largest unrecorded property sales.
Chasing quality: Atlanta office sales surged to $1.4B in 2025—its strongest year since 2022—as investors zero in on high-end properties.
Turning a corner: Orange County posted positive office absorption in Q4 2025, as demand shifts to top-tier space and conversions tighten supply.

🏨 HOSPITALITY

Retro resort: Atari and Räkkhaus are launching a retro-futuristic hotel in Phoenix inspired by Tron, Blade Runner, and Tetris, featuring immersive gaming-themed design and amenities.
Brokerage boost: Franklin Street has acquired hospitality brokerage Hodges Ward Elliott, integrating 20 brokers and expanding services amid a recovering hotel deal market.
World Cup boost: Summit Hotel Properties expects a 2026 World Cup demand boost, with CEO Jonathan Stanner citing stronger business travel, rebounding leisure, and strategic asset recycling for growth.

📈 CHART OF THE DAY

Semi-liquid credit funds are booming, but their illiquid assets and limited redemptions may falter in a downturn.

CRE Trivia (Answer)🧠

According to RentCafe, Washington, D.C. ranked as the most livable U.S. metro in 2026.

Blackstone’s BREIT Bounces Back With 8.1% Return in 2025

Data centers delivered big for BREIT, driving its 2025 return to 8.1% and signaling a shift in CRE momentum.