During the most recent commercial real estate bubble, two things happened in tandem.
Predictably, commercial real estate prices soared, rising to a crescendo in late 2021 to early 2022.
Throughout this time, the market for real estate investment trusts, companies that invest directly in commercial real estate, prospered-at least superficially.
Predictably, the commercial real estate market responded with a crash.
Beginning in late 2022, BREIT began receiving large redemption requests from investors who were concerned about their exposure to commercial real estate and wished to cash out.
In Pavlovian style, the letter also references, as justification for the demand, four other commercial real estate bailout programs executed by the government in the last fifteen years.
In the midst of the ongoing commercial real estate crash, private REITs are suppressing price signals and hiding the extent of the damage in their portfolios on the hope, conditioned by years of similar treatment, that the Fed will soon rescue them from their failures.
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