- Private credit funds, including Blackstone and BlackRock vehicles, are seeing increased redemption requests.
- Investor capital is starting to rotate back into nontraded real estate investment trusts (REITs).
- Nonlisted REIT fundraising rose to $593.1M in January, indicating renewed interest.
- Blackstone REIT leads the nonlisted sector, with positive net fund flows and rising investments.
Private Credit Faces Headwinds
Private credit funds once attracted strong institutional demand. Now they face rising redemption requests in early 2026, according to CoStar. Blackstone Private Credit, the largest nonlisted BDC with $48.2B in net asset value, expanded its repurchase limits. The firm also deployed $400M of its own capital to meet redemption requests.
Meanwhile, other funds report similar pressure. BlackRock’s HPS Corporate Lending Fund and Blue Owl Technology Income Fund both exceeded standard share repurchase limits as investors pulled capital.
Real Estate Regaining Momentum
Amid softer demand for private credit, nontraded real estate investment trusts are benefiting from a shift in investor sentiment. Fundraising for nonlisted REITs jumped to $593.1M in January after consecutive quarters of positive net investment. The rebound also follows a period when several major funds worked through heavy redemption queues and stabilized investor liquidity, highlighting renewed confidence in the sector. Mortgage and net lease REITs, in particular, are drawing increased capital as borrowing costs fall and property fundamentals stabilize.
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Blackstone at the Pivot Point
Blackstone sits at the center of the current capital rotation. The firm manages the largest private credit and nontraded real estate funds in the US. Blackstone REIT holds $95.7B in net real estate investments. The fund has gained market share and reported positive inflows. This marks its strongest fundraising stretch since 2022. Management credits the performance to a diversified portfolio. The holdings include logistics assets and data centers. The firm expects additional gains as real estate continues moving into recovery.
What to Watch
Should current trends persist, further outflows from private credit funds could fuel additional investment in nontraded REITs like Blackstone REIT. Sector watchers expect falling interest rates and improving asset fundamentals to sustain this momentum throughout 2026, shifting the alternative investment landscape.
