- Blackstone Real Estate Income Trust (Breit) delivered an 8.1% return in 2025, its best in three years.
- Data center investments accounted for 21% of Breit’s holdings and were key to its gains.
- Investor redemptions stabilized after challenging years, signaling sector recovery.
- Breit outperformed both public REITs and most other nontraded real estate investment trusts in 2025.
Strong Recovery for Data Center-Focused Fund
Blackstone’s Real Estate Income Trust, known as Breit, delivered an 8.1% total return in 2025, reports The WSJ. This marked a major rebound after two years of mediocre or negative results. The strong performance was driven by Breit’s large exposure to data centers. These assets benefited from soaring demand linked to artificial intelligence and tech sector growth.
Data Center Investments Outperform
Breit’s 2021 acquisition of QTS, a major global data center operator, proved instrumental in driving returns. By year-end, the fund allocated roughly 21% of its portfolio to data centers, a sector that outpaced other property types as interest rates remained elevated. Most other nontraded REITs reported weaker results for the year, averaging 1.5% through the third quarter.
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Improved Liquidity and Investor Confidence
After facing heavy redemptions and limiting withdrawals during the sector’s recent downturn, the fund was able to meet all investor redemption requests starting in early 2024. This reversal, combined with improved performance in 2025, provides evidence that commercial real estate is regaining investor confidence and stability after a challenging period for nontraded real estate investment trusts. Industry-wide, other nontraded REITs have also taken steps to regain footing by clearing redemption backlogs and repositioning portfolios amid shifting market conditions.
Outlook for Nontraded Real Estate Investment Trusts
Nontraded REITs share characteristics with publicly traded REITs, but do not trade on stock exchanges. This reduces market volatility for investors, though it can also mean more restrictions on liquidity. As the data center sector remains strong, funds like Blackstone’s Breit continue to stand out, though overall fundraising in the industry has yet to return to the peak levels seen during periods of low interest rates.
