Blackstone brings institutionalcaliber private real estate to income-focused individuals THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES DESCRIBED HEREIN, AND MUST BE READ IN CONJUNCTION WITH THE PROSPECTUS IN ORDER TO UNDERSTAND FULLY ALL OF THE IMPLICATIONS AND RISKS OF THE OFFERING TO WHICH THIS SALES AND ADVERTISING LITERATURE RELATES. A COPY OF THE PROSPECTUS MUST BE MADE AVAILABLE TO YOU IN CONNECTION WITH THIS OFFERING, AND IS AVAILABLE AT WWW.BREIT.COM Blackstone Advisory Partners L.P., Dealer Manager / Member FINRA
SUMMARY OF RISK FACTORS Blackstone Real Estate Income Trust, Inc. ( BREIT ) is a non-traded REIT that seeks to invest in stabilized commercial real estate properties diversified by sector with a focus on providing current income. This investment involves a high degree of risk. You should purchase these securities only if you can afford the complete loss of your investment. You should read the prospectus carefully for a description of the risks associated with an investment in Blackstone Real Estate Income Trust. Some of these risks include but are not limited to the following: BREIT has a limited operating history and there is no assurance that we will achieve our investment objectives. This is a blind pool offering. We have only made limited investments to date and you will not have the opportunity to evaluate our future investments before we make them. Since there is no public trading market for shares of our common stock, repurchase of shares by us will likely be the only way to dispose of your shares. Our share repurchase plan provides stockholders with the opportunity to request that we repurchase their shares on a monthly basis, but we are not obligated to repurchase any shares and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular month in our discretion. In addition, repurchases will be subject to available liquidity and other significant restrictions. Further, our board of directors may modify, suspend or terminate our share repurchase plan if it deems such action to be in our best interest and the best interest of our stockholders. As a result, our shares should be considered as having only limited liquidity and at times may be illiquid. We cannot guarantee that we will make distributions, and if we do we may fund such distributions from sources other than cash flow from operations, including, without limitation, the sale of assets, borrowings, return of capital or offering proceeds, and we have no limits on the amounts we may pay from such sources. The purchase and repurchase price per share for each class of common stock will vary and will generally equal our prior month s net asset value ( NAV ) per share, as determined monthly, plus applicable upfront selling commissions and dealer manager fees. We may offer shares at a price that we believe reflects the NAV per share of such stock more appropriately than the prior month s NAV per share in cases where we believe there has been a material change (positive or negative) to our NAV per share since the end of the prior month. We have no employees and are dependent on BX REIT Advisors L.L.C. (the Advisor ) to conduct our operations. The Advisor will face conflicts of interest as a result of, among other things, the allocation of investment opportunities among us and other Blackstone accounts, the allocation of time of its investment professionals and the substantial fees that we will pay to the Advisor. This is a best efforts offering. If we are not able to raise a substantial amount of capital in the near term, our ability to achieve our investment objectives could be adversely affected. On acquiring shares, you will experience immediate dilution in the net tangible book value of your investment. There are limits on the ownership and transferability of our shares. If we fail to qualify as a REIT and no relief provisions apply, our NAV and cash available for distribution to our stockholders could materially decrease. We do not own the Blackstone name, but we are permitted to use it as part of our corporate name pursuant to a trademark license agreement with an affiliate of The Blackstone Group L.P. (together with its affiliates, Blackstone ). Use of the name by other parties or the termination of our trademark license agreement may harm our business. While BREIT s investment strategy is to invest in stabilized commercial real estate properties diversified by sector with a focus on providing current income to investors, an investment in BREIT is not an investment in fixed income. Fixed income has material differences from an investment in a non-traded REIT, including those related to vehicle structure, investment objectives and restrictions, risks, fluctuation of principal, safety, guarantees or insurance, fees and expenses, liquidity and tax treatment. We intend to qualify as a REIT for U.S. federal income tax purposes beginning with our taxable year ending December 31, 2017. However, if we fail to qualify as a REIT and no relief provisions apply, our NAV and cash available for distribution to our stockholders could materially decrease. The acquisition of investment properties may be financed in substantial part by borrowing, which increases our exposure to loss. The use of leverage involves a high degree of financial risk and will increase the exposure of the investments to adverse economic factors. Investing in commercial real estate assets involves certain risks, including but not limited to: tenants inability to pay rent; increases in interest rates and lack of availability of financing; tenant turnover and vacancies; and changes in supply of or demand for similar properties in a given market. BREIT will directly own private real estate assets. Any references to private real estate and direct ownership is referring to the BREIT strategy. Individual investors will own shares of common stock in BREIT as opposed to direct ownership of private, non-traded real estate assets. Numerical data is approximate and as of December 31, 2017. The words we, us, and our refer to Blackstone Real Estate Income Trust, Inc., together with its consolidated subsidiaries, including BREIT Operating Partnership L.P. (the Operating Partnership ), a Delaware limited partnership of which we are the general partner, unless the context requires otherwise. Numerical data relating to Blackstone includes activities of Blackstone Real Estate s public and private portfolio companies (unless otherwise noted). IMPORTANT DISCLOSURE ABOUT OTHER BLACKSTONE REAL ESTATE FUNDS This sales material includes information related to prior investments Blackstone Real Estate has made, in which BREIT will not have any interest. Prospective investors should note that the investment programs, objectives, leverage policies and strategies of Blackstone s opportunistic real estate private equity funds (the Opportunistic Real Estate Equity Funds ), the Blackstone real estate debt funds (the Real Estate Debt Funds ), and core+ real estate private equity funds (the Core+ Real Estate Equity Funds ) are substantially different from the investment program and objectives of BREIT, despite each strategy focusing on making real estate-related investments. Specifically, the Opportunistic Real Estate Equity Funds invest in opportunistic real estate and real estate-related assets globally (which often are undermanaged assets and with higher potential for equity appreciation), the Real Estate Debt Funds primarily make real estate-related debt investments on an opportunistic basis and globally, and the Core+ Real Estate Equity Funds invest in core+ real estate and real estate-related assets globally (which are generally substantially stabilized assets generating relatively stable cash flow, with a focus on office, multifamily, industrial and retail assets in major U.S. markets), whereas BREIT will generally target primarily stabilized income-oriented commercial real estate in the United States and to a lesser extent real estate-related securities. The information provided herein regarding the Opportunistic Real Estate Equity Funds, the Real Estate Debt Funds, and the Core+ Real Estate Equity Funds is, therefore, provided solely for background purposes. FORWARD-LOOKING STATEMENT DISCLOSURE This sales material contains forward-looking statements about our business, including, in particular, statements about our plans, strategies and objectives. You can generally identify forward-looking statements by our use of forward-looking terminology such as may, will, seek, expect, intend, anticipate, estimate, believe, continue or other similar words. These statements include our plans and objectives for future operations, including plans and objectives relating to future growth and availability of funds, and are based on current expectations that involve numerous risks and uncertainties. Assumptions relating to these statements involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to accurately predict and many of which are beyond our control. Although we believe the assumptions underlying the forward-looking statements, and the forward-looking statements themselves, are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that these forward-looking statements will prove to be accurate and our actual results, performance and achievements may be materially different from that expressed or implied by these forwardlooking statements. In light of the significant uncertainties inherent in these forward looking statements, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans, which we consider to be reasonable, will be achieved. You should carefully review the Risk Factors section of our prospectus for a discussion of the risks and uncertainties that we believe are material to our business, operating results, prospects and financial condition. Except as otherwise required by federal securities laws, we do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This sales material must be read in conjunction with the prospectus in order to fully understand all the implications and risks of the offering of securities to which it relates. This sales material is neither an offer to sell nor a solicitation of an offer to buy securities. An offering is made only by the prospectus. Neither the Securities and Exchange Commission, the Attorney General of the State of New York nor any other state securities regulator has approved or disapproved of these securities or determined if the prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Blackstone Real Estate Income Trust (BREIT) Blackstone Real Estate Income Trust (BREIT) provides individual investors with access to Blackstone s leading institutional real estate investment platform. BREIT seeks to directly own stabilized income-generating U.S. commercial real estate across the key property types, including multifamily, industrial, retail, hotel, healthcare and office. Jon Gr ay P r e s i d e n t & C h i e f O p e r a t i n g O f f i c e r, B l a c k s t o n e Why invest? 1 Leading Real Estate Platform Alignment of Interests Incomedriven Appreciation Potential Diversified across Property Types Lower Volatility 2 1. Please refer to pages 2 3 for more information on these offering features. 2. BREIT s share price is subject to less volatility because its per share NAV is based on the value of real estate assets it owns and is not subject to market pricing forces as are the share prices of publicly traded REITs. The value of BREIT s underlying investments may fluctuate and may be worth less than BREIT initially paid for them. Although BREIT s share price is subject to less volatility, BREIT shares are significantly less liquid than shares of a publicly traded REIT, and are not immune to fluctuations. 1
What is BREIT? Shifting the paradigm for non-traded REITs Leading Real Estate Platform BREIT gives individual investors access to Blackstone s leading institutional real estate platform with proven real estate experience and prominent U.S. presence. Income-driven 1 BREIT will directly own stabilized U.S. commercial real estate assets which have historically delivered attractive and consistent rental income to investors. Diversified 2 BREIT will invest across property types and active sector selection may help drive higher returns. Alignment of Interests 3 BREIT s advisor is compensated via management fees and a performance participation allocation based on total return.breit s advisor does not receive acquisition, disposition, financing or development fees. Appreciation Potential 4 BREIT s proactive asset management may drive higher rents and property values helping to generate capital appreciation for investors. Lower Volatility 5 BREIT is a non-traded vehicle which means the value of our shares is more closely tied to real estate fundamentals as opposed to public equities. 1. There is no assurance we will pay distributions in any particular amount, if at all. Any distributions we make will be at the discretion of our board of directors. We may fund any distributions from sources other than cash flow from operations, including, without limitation, the sale of assets, borrowings, return of capital or offering proceeds (including from sales of our common stock or Operating Partnership units to the Special Limited Partner, an affiliate of Blackstone), and we have no limits on the amounts we may pay from such sources. 2. There is no guarantee that BREIT will be diversified. Diversification does not eliminate risk or guarantee a profit. 3. Blackstone will also face conflicts of interest as a result of, among other things, the allocation of investment opportunities among us and other Blackstone accounts, the allocation of time of its investment professionals and the substantial fees that we will pay to Blackstone. 4. There can be no assurance that BREIT will achieve its objective or avoid losses. 5. BREIT s share price is subject to less volatility because its per share NAV is based on the value of real estate assets it owns and is not subject to market pricing forces as are the share prices of publicly traded REITs. The value of BREIT s underlying investments may fluctuate and may be worth less than BREIT initially paid for them. Although BREIT s share price is subject to less volatility, BREIT shares are significantly less liquid than shares of a publicly traded REIT, and are not immune to fluctuations. 2
Diversified portfolio concentrated in high growth markets 1 Total Asset Value $ 4.8B Number of Properties 2 115 Occupancy 3 93% Seattle/ Portland 5% Northern California 5% Las Vegas 13% Chicago 5% Other U.S. Markets 21% Phoenix 7% Dallas 13% Atlanta 12% Florida 20% By Property Type 1 70% 18% Multifamily Industrial 8% Hospitality 3% Retail As of December 31, 2017. 1. Geography and property type weightings are measured as the fair value of each category against the total fair value of all real estate properties. Geographies shown on the map represent markets totaling greater than or equal to 5% of fair value. Totals may not sum due to rounding. 2. This number reflects real estate property investments only and does not include investments in debt securities. 3. Occupancy is weighted by the total value of all real estate properties, excluding hospitality investments. 3
Why Blackstone? BREIT is sponsored by one of the world s preeminent real estate investors $115B investor capital under management Leading U.S. presence across the key property types Proven real estate experience 1 67K multifamily units 42M industrial square feet Opportunistic Equity Real Estate Debt Core+ Equity 139K hotel keys 37M retail square feet over 27 years of real estate investing Data as of December 31, 2017. 1. With respect to all references to Blackstone s prior operating history, please see the Summary of Risk Factors and the additional information at the beginning of this sales material. Neither the Opportunistic Real Estate Equity Funds, Real Estate Debt Funds or Core+ Real Estate Equity Funds share BREIT s investment objective of investing primarily in stabilized income-oriented commercial real estate in the United States with a primary objective of providing current income in the form of regular, stable cash distributions to achieve an attractive dividend yield. Specifically, the Opportunistic Real Estate Equity Funds invest in opportunistic real estate and real estate-related assets globally (which often are undermanaged assets and with higher potential for equity appreciation) and the Core+ Real Estate Equity Funds invest in core+ real estate and real estate-related assets globally (which are generally substantially stabilized assets generating relatively stable cash flow), with a focus on office, multifamily, industrial and retail assets in major U.S. markets. The Real Estate Debt Funds primarily make real estate-related debt investments on an opportunistic basis and globally. 4
Global business with continuity in approach, people and process Generating consistent returns requires a differentiated view and conviction Identify opportunity Pursue in scale Maximize value Insight Scale Real-time proprietary data from Blackstone s portfolio Source, diligence and execute large, complex transactions 450+ professionals globally 1 investment committee Note: Represents the Blackstone Real Estate business. For a description of BREIT s strategy and investments, visit www.breit.com. 5
Why commercial real estate? Diversifying with commercial real estate may create a more efficient portfolio Fixed income Total U.S. Debt Outstanding $41 trillion 1 Real estate U.S. Commercial Real Estate Marketplace $16 trillion 2 Equities Total U.S. Stock Market Capitalization $30 trillion 1 Potential income from tenant rents Potential appreciation from increased property values Yield-oriented Capital appreciation-oriented Market capitalizations as of December 31, 2017, unless otherwise noted. There is no assurance that real estate investments will achieve capital appreciation or provide regular, stable distributions. Potential Portfolio Benefits 3 Based on historical analysis, the inclusion of commercial real estate in a traditional portfolio of stocks and bonds has added modestly to returns while reducing overall volatility. Returns and Volatility (1998-2017, Annualized) 3 6.8% RETURN 9.2% VOLATILITY FIXED INCOME 40% EQUITIES 60% 7.1% RETURN 8.6% VOLATILITY FIXED INCOME 35% COMMERCIAL RE 10% EQUITIES 55% 1. Source: The World Bank, Securities Industry and Financial Markets Association (SIFMA), December 31, 2017 2. Source: Green Street Advisors, December 31, 2017. 3. Source: Morningstar Direct, NCREIF. 20-year period ending December 31, 2017. Portfolios with and without commercial real estate are hypothetical and this is not a recommendation of how to allocate a portfolio. Returns and Volatility presented are on an annualized basis. Past performance does not guarantee future results. The indices presented represent investments that have material differences from an investment in a non-traded REIT, including those related to vehicle structure, investment objectives and restrictions, risks, fluctuation of principal, safety guarantees or insurance, fees and expenses, liquidity and tax treatment. Commercial real estate is represented by the NCREIF Open-End Diversified Core (ODCE) Index and reflects the returns of diversified, private core, open-end funds that invest in private real estate. NCREIF ODCE quotes returns including leverage and fund expenses, but excluding management and advisory fees. The term core typically reflects lower risk investment strategies, utilizing low leverage and generally represented by equity ownership positions in stable U.S. operating properties. Returns net of management and advisory fees would be materially lower. An investment in BREIT is different from the NCREIF ODCE, which is not an investable index. Equities are represented by the total return of the S&P 500 Index, including dividends (S&P 500 Index) and are subject to market risk. Fixed Income is represented by the Barclays US Aggregate Bond Index and are subject to credit risk. The S&P 500 Index and the Barclays US Aggregate Bond Index are meant to illustrate general market performance; it is not possible to invest directly in an index. BREIT shares are significantly less liquid 6 than fixed income and equities. See page 12 for a description of each index.
A distinctive source of income Historical yield comparison 1 2008 2017 Average Annual Yield 5.1% 4.0% Income derived from commercial real estate has exceeded that from other asset classes. 2.4% The majority of total return comes from income. 0.4% Commercial real estate Investmentgrade bonds Equities T-Bills Real Estate Income and Inflation 2 Indexed, 1995=100 200 175 150 125 Real estate net operating income U.S. CPI Commercial real estate income has increased faster than inflation over the past 20+ years. Growth in real estate income was driven by a number of factors, including market rent growth and rent escalation clauses. Bonds generally have fixed coupons. 100 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 1. As of December 31, 2017. Source: Morningstar Direct, NCREIF. Past performance does not guarantee future results. An investment in BREIT is not a direct investment in real estate, and has material differences from a direct investment in real estate, including those related to fees and expenses, liquidity and tax treatment. BREIT s share price is subject to less volatility because its per share NAV is based on the value of real estate assets it owns and is not subject to market pricing forces as is the price of investment-grade bonds, equities or T-bills. Although BREIT s share price is subject to less volatility, BREIT shares are significantly less liquid than these asset classes, and are not immune to fluctuations. Commercial real estate is not traded on an exchange and will have less liquidity and price transparency. The value of commercial real estate may fluctuate and may be worth less than was initially paid for it. Commercial real estate is represented by the NCREIF Open-End Diversified Core (ODCE) Index, which is an equal weighted, time weighted index of open-end core real estate funds reported net of fees. The term core typically reflects lower risk investment strategies, utilizing low leverage and generally represented by equity ownership positions in stable U.S. operating properties. Funds are weighted equally, regardless of size. NCREIF ODCE represents the broad-based commercial real estate market, with its income returns based on net operating income after debt service; distributions from BREIT are not guaranteed and may be sourced from non-income items including, without limitation, the sale of assets, borrowings, return of capital or offering proceeds, and we have no limits on the amounts we may pay from such sources. While funds used in this benchmark have characteristics that differ from BREIT (including differing management fees and leverage), BREIT s management feels that the NCREIF ODCE is an appropriate and accepted index for the purpose of evaluating the historic yields of direct real estate funds. Investors cannot invest in this index. Comparisons shown are for illustrative purposes only and do not represent specific investments. BREIT has the ability to utilize higher leverage than is allowed for the funds in the NCREIF ODCE, which could increase BREIT s volatility relative to the index. Additionally, an investment in BREIT is subject to certain fees that are not contemplated in the NCREIF ODCE, which is not an investable index. Stocks are represented by the dividend yield of the S&P 500 Index. The S&P 500 Index is a widely used barometer of U.S. stock market performance; the key risk of the S&P 500 Index is the volatility that comes with exposure to the stock market. Investment-grade bonds are represented by bond yield to maturity of the Barclays US Aggregate Bond Index. Investment grade bonds provide broad exposure to U.S. investment grade bonds including government bonds. Increases in interest rates may cause the price of bonds to decrease. Corporate bonds are subject to credit risk. T-bills are represented by the BofAML 3 Month T-Bill Index and are subject to interest rate risk. Treasury Bills are guaranteed as to the timely payment of principal and interest. Indices are meant to illustrate general market performance; it is not possible to invest directly in an index. An investment in investment grade bonds and T-bills is generally considered to be a less risky investment than commercial real estate. See page 12 for further descriptions regarding each index. 2. As of December 31, 2017. Source: Green Street Advisors, Bureau of Labor Statistics. Net operating income (NOI) growth represents the average NOI growth by year across the apartment, industrial, mall, office and strip retail sectors. The Consumer Price Index (CPI) measures changes in the prices paid by urban consumers for a representative basket of goods and services. Past performance is no guarantee of future results. NOI may not be correlated to or continue to keep pace with inflation. 7
A better way to invest in commercial real estate? Attractive total returns with lower volatility Cumulative historical returns 1 Indexed, 2011=100 250 225 200 175 150 125 100 Public equities 247% Commercial real estate 213% Commercial real estate has exhibited 88% less volatility than public equities. 2 The property value of commercial real estate may fluctuate. 75 2011 2012 2013 2015 2016 2017 1. As of December 31, 2017. Source: Morningstar Direct, NCREIF. Past performance does not guarantee future results. An investment in BREIT is not a direct investment in real estate, and has material differences from a direct investment in real estate, including those related to fees and expenses, liquidity and tax treatment. BREIT s share price is subject to less volatility because its per share NAV is based on the value of real estate assets it owns and is not subject to market pricing forces as is the price of public equities. Although BREIT s share price is subject to less volatility, the value of real estate may fluctuate and may be worth less than was initially paid for it. BREIT shares are significantly less liquid than public equities, and are not immune to fluctuations. Commercial real estate is represented by the NCREIF ODCE and reflects the total returns of diversified, private core, open-end funds including leverage and fund expenses, but excluding management and advisory fees. The term core typically reflects lower risk investment strategies, utilizing low leverage and generally represented by equity ownership positions in stable U.S. operating properties. Funds are weighted equally, regardless of size. While funds used in this benchmark have characteristics that differ from BREIT (including differing management fees and leverage), BREIT s management feels that the NCREIF ODCE is an appropriate and accepted index for the purpose of evaluating the total returns of direct real estate funds. Investors cannot invest in this index. Comparisons shown are for illustrative purposes only and do not represent specific investments. BREIT has the ability to utilize higher leverage than is allowed for the funds in the NCREIF ODCE, which could increase BREIT s volatility relative to the index. Additionally, an investment in BREIT is subject to certain fees that are not contemplated in the NCREIF ODCE. Public equities are represented by the S&P 500 Index. The S&P 500 Index is a widely used barometer of U.S. stock performance with broad sector representation, not just real estate; the key risk of the S&P 500 Index is the volatility that comes with exposure to the stock market. Commercial real estate values are based on appraisals, while public equities are based upon market prices. 2. Annualized standard deviation of the NCREIF ODCE relative to the S&P 500 Index for the 7-year period ending December 31, 2017. 8
The importance of diversification and sector selection 1 Commercial real estate sector returns 2 2008. 2009. 2010. 2011. 2012. 2013. 2014. 2015. 2016. 2017. Best performing sector Retail Hotel Retail Apartment Apartment Retail Retail Industrial Retail Industrial Industrial Return differential between best and worst sector 523 946 925 366 335 518 313 329 760 814 Many REITs, public and non-traded, focus on a single property type. BREIT seeks to invest across property types. Diversification by asset class or among real estate sectors may help mitigate losses and result in steadier returns. 1. There is no guarantee that BREIT will be diversified. Diversification by asset class or among real estate sectors does not necessarily protect against losses. 2. Source: NCREIF Property Index, as of December 31, 2017. One basis point is equal to 1/100th of 1%. 9
What are the details? Offering highlights 1 KEY TERMS Product Structure Portfolio allocation Sponsor/Advisor Maximum offering Offering price 2 Subscriptions/NAV frequency BREIT is a non-traded REIT focused on investing in primarily stabilized commercial real estate properties diversified by sector with a focus on providing current income to investors Non-exchange traded, perpetual life real estate investment trust (REIT) Targeting at least 80% to properties and up to 20% to real estate debt securities, cash and/or cash equivalents The Blackstone Group L.P. / BX REIT Advisors L.L.C. $5 billion Generally equal to our prior month s NAV per share for such class as of the last calendar day of such month, plus applicable selling commissions and dealer manager fees Monthly purchases as of the first calendar day of each month; subscription requests must be received at least five business days prior to the first calendar day of the month NAV per share, which will generally be equal to our transaction price, will generally be available within 15 calendar days of month end Transaction price will be available on www.breit.com and in prospectus supplements. If the transaction price is not made available on or before the eighth business day before the first calendar day of the month, or a previously disclosed transaction price for that month is changed, then we will provide notice of such transaction to subscribing investors Distributions Monthly (not guaranteed, subject to board approval) 3 Minimum initial investment 4 $2,500 Suitability standards 4 Either (1) a net worth of at least $250,000 or (2) a gross annual income of at least $70,000 and a net worth of at least $70,000. Certain states have additional suitability standards. See the prospectus for more information. UPFRONT ONGOING Share repurchase plan Tax reporting SHARE CLASS-SPECIFIC FEES Availability Monthly repurchases will be made at the transaction price, which is generally equal to our prior month s NAV Shares not held for at least one year will be repurchased at 95% of that month s transaction price Overall limit of 2% of NAV per month and 5% of NAV per calendar quarter Repurchase requests must be received in good order by the second to last business day of the applicable month We are not obligated to repurchase any shares and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular month in our discretion The share repurchase plan is subject to other limitations and our board may modify, suspend or terminate the plan Form 1099-DIV CLASS I CLASS D CLASS S CLASS T Through fee-based (wrap) programs, registered investment advisors, and other institutional and fiduciary accounts Through transactional/brokerage accounts Selling commissions 4 None None Up to 3.5% Up to 3.0% Dealer manager fee 4 None None None 0.50% Stockholder servicing fees 4 (per annum, payable monthly) ADVISOR FEES Management fee Performance participation allocation None 0.25% 0.85% 1.25% per annum of NAV, payable monthly 12.5% of the annual total return, subject to a 5% annual hurdle amount and a high water mark 0.65% financial advisor 0.20% dealer 1. Terms summarized herein are for informational purposes and qualified in their entirety by the more detailed information set forth in BREIT s prospectus. You should read the prospectus carefully prior to making an investment. 2. We may offer shares at a price that we believe reflects the NAV per share of such stock more appropriately than the prior month s NAV per share, including by updating a previously disclosed offering price, in cases where we believe there has been a material change (positive or negative) to our NAV per share since the end of the prior month. 3. There is no assurance we will pay distributions in any particular amount, if at all. Any distributions we make will be at the discretion of our board of directors. We may fund any distributions from sources other than cash flow from operations, including, without limitation, the sale of assets, borrowings, return of capital or offering proceeds (including from sales of our common stock or Operating Partnership units to the Special Limited Partner, an affiliate of Blackstone), and we have no limits on the amounts we may pay from such sources. 4.Select broker-dealers may have different suitability standards, may not offer all share classes, and/or may offer BREIT at a higher minimum initial investment. With respect to Class T shares, the amount of upfront selling commissions and dealer manager fees may vary at select broker-dealers, provided that the sum will not exceed 3.5% of the transaction price. The financial advisor and dealer stockholder servicing fee for Class T shares may also vary at select broker-dealers, provided that the sum of such fees will always equal 0.85% per annum of the aggregate NAV. 10
Frequently asked questions Why do you think investors would benefit from an allocation to commercial real estate? The $16 trillion U.S. commercial real estate market 1 is the third largest asset class after the $41 trillion U.S. fixed income market and $30 trillion U.S. equities market. 2 Commercial real estate is a diverse sector spanning multiple geographies and asset types including office, hotels, multifamily (apartments), retail (shopping centers), and industrial (warehouses). Commercial real estate may offer the characteristics of both bonds (yield) and equities (capital appreciation). The asset class can provide a current income stream similar to fixed income through rents from properties, while also potentially generating capital appreciation through increases in property values. In addition, total returns from commercial real estate have historically exhibited low correlation relative to fixed income or equity investments. As a result, an allocation to real estate could result in higher returns for an investor s overall portfolio while potentially reducing volatility. Commercial real estate returns may also act as an inflation hedge, as values have historically risen with inflation and interest rates. Compared to equities and fixed income, commercial real estate offers less liquidity. What do you think is particularly interesting about the income characteristics of commercial real estate? Over the past twenty years, nearly 80% of the total return of commercial real estate has come from income, 3 which is generated by rents paid by tenants at properties. However, unlike fixed coupons from bonds, the income from real estate has historically outpaced inflation. In addition, bonds have principal payments that do not grow at maturity, while real estate may appreciate over time from higher rents as well as from economic expansion, employment growth, or population growth. An investment in fixed income differs significantly from non-traded REITs and fixed income is generally considered to be a less risky investment than commercial real estate. What are the key differences between listed and non-traded real estate investment trusts (REITs)? Publicly listed and non-traded REITs both provide access to a pool of real estate assets for individual investors and are governed by similar tax rules regulating REITs (e.g., requiring at least 90% payouts of income to shareholders). Both structures may provide compelling total returns with an emphasis on yield. One key difference is that publicly listed REITs trade on a securities exchange and offer the attraction of daily liquidity to investors. Non-traded REITs do not trade on a securities exchange, and therefore while the property values of non-traded or commercial real estate may fluctuate, they are somewhat insulated from the daily volatility of the public markets. What are the primary risks of investing in commercial real estate (non-traded REITs)? Like any investment product, BREIT may underperform relative to its stated investment objective; market cycles and real estate conditions could hinder performance over the course of any individual investor s time horizon; the lack of a public trading market for BREIT and limitations on its share repurchase plan will limit investment liquidity; BREIT will begin as a blind pool and grow its portfolio over time; there is no guarantee of distributions; REIT qualification risk; leverage risk. Please refer to Risk Factors in the prospectus for a more detailed explanation of associated risks. How is BREIT different from other non-traded REITs? BREIT is the first perpetual-life, monthly-nav, non-traded REIT in the marketplace. It brings institutional management by one of the world s largest commercial real estate investors to individual investors. It offers transparent and institutional fees that align interests lower upfront fees and no acquisition, disposition, development or financing fees. The Advisor instead is compensated based on performance; 1.25% management fee on net assets and 12.5% performance participation allocation on total return subject to a 5% hurdle amount and a high water mark. BREIT also offers share classes with low or no sales charges. In order to provide regular liquidity for share repurchases under its share repurchase program, BREIT targets allocating up to 20% of NAV to real estate debt securities, cash and/or cash equivalents. BREIT will seek to invest across asset types, including multifamily, office, hotels, retail, and industrial, with the intention of diversifying the portfolio. Note: Market capitalizations as of December 31, 2017, unless otherwise noted. There is no assurance that real estate investments will achieve capital appreciation or provide regular, stable distributions. 1. Green Street Advisors, December 31, 2016. 2. The World Bank, Securities Industry and Financial Markets Association (SIFMA), December 31, 2017. 3. NCREIF ODCE based on 10-year period ending December 31, 2017. 11
Please note KEY TERM DEFINITIONS Performance participation allocation: The Special Limited Partner will hold a performance participation interest in the Operating Partnership that entitles it to receive an allocation from our Operating Partnership equal to 12.5% of the Total Return, subject to a 5% Hurdle Amount and a High Water Mark (each term as defined below), with a catch-up. Such allocation will be made annually and accrue monthly. Total Return for any period since the end of the prior calendar year shall equal the sum of: (i) all distributions accrued or paid (without duplication) on the Operating Partnership units outstanding at the end of such period since the beginning of the thencurrent calendar year plus (ii) the change in aggregate NAV of such units since the beginning of the year, before giving effect to (x) changes resulting solely from the proceeds of issuances of Operating Partnership units, (y) any allocation/accrual to the performance participation interest and (z) applicable stockholder servicing fee expenses (including any payments made to us for payment of such expenses). For the avoidance of doubt, the calculation of Total Return will (i) include any appreciation or depreciation in the NAV of units issued during the then-current calendar year but (ii) exclude the proceeds from the initial issuance of such units. Hurdle Amount for any period during a calendar year means that amount that results in a 5% annualized internal rate of return on the NAV of the Operating Partnership units outstanding at the beginning of the then-current calendar year and all Operating Partnership units issued since the beginning of the then-current calendar year, taking into account the timing and amount of all distributions accrued or paid (without duplication) on all such units and all issuances of Operating Partnership units over year. Loss Carryforward Amount shall initially equal zero and shall cumulatively increase by the absolute value of any negative annual Total Return and decrease by any positive annual Total Return, provided that the Loss Carryforward Amount shall at no time be less than zero. The effect of the Loss Carryforward Amount is that the recoupment of past annual Total Return losses will offset the positive annual Total Return for purposes of the calculation of the Special Limited Partner s performance participation. This is referred to as a High Water Mark. INDEX DEFINITIONS The Barclays US Aggregate Bond Index is an index of U.S. dollar-denominated, investment-grade U.S. corporate government and mortgage-backed securities. The NCREIF Open-End Diversified Core (ODCE) is a capitalization-weighted, gross of fees, time-weighted return index with an inception date of January 1, 1978. Published reports may also contain equal-weighted and net of fees information. Open-end Funds are generally defined as infinite-life vehicles consisting of multiple investors who have the ability to enter or exit the fund on a periodic basis, subject to contribution and/or redemption requests, thereby providing a degree of potential investment liquidity. The term Diversified Core Equity style typically reflects lower risk investment strategies utilizing low leverage and generally represented by equity ownership positions in stable U.S. operating properties. The S&P 500 Total Return Index is a market capitalization-weighted index that includes 500 stocks representing all major industries. Returns are denominated in U.S. dollars and include dividends. The Index is a proxy of the performance of the broad U.S. economy through changes in aggregate market value. CPI All Urban is a measure that examines the changes in the price of a basket of goods and services purchased by urban consumers. The urban consumer population is deemed by many as a better representative measure of the general public because most of the country s population lives in highly populated areas, which represent close to 90% of the total population. BofAML 3 Month T-Bill Index is an unmanaged market index of U.S. Treasury securities maturing in 90 days that assumes reinvestment of all income. The NCREIF Property Index (NPI) is a quarterly time series composite total rate of return measure of investment performance of a very large pool of unleveraged individual commercial real estate properties acquired in the private market for investment purposes only. All properties in the NPI have been acquired, at least in part, on behalf of tax-exempt institutional investors the great majority being pension funds. As such, all properties are held in a fiduciary environment. NCREIF data reflects the returns of a blended portfolio of institutional-quality real estate and does not reflect the use of leverage or the impact of management and advisory fees. Returns net of management and advisory fees would be materially lower. 12
ADDITIONAL IMPORTANT DISCLOSURES This material was not created by any third party registered broker-dealers or investment advisers who are distributing shares of BREIT (each a Dealer and collectively, the Dealers ). The Dealers have made no independent verification of the information provided and do not guarantee the accuracy or completeness of such information. This material is not to be reproduced or distributed to any other persons (other than professional advisors of the investors or prospective investors, as applicable, receiving this material) and is intended solely for the use of the persons to whom it has been delivered. The sole purpose of this material is to inform, and it in no way is intended to be an offer or solicitation to purchase or sell any security, other investment or service, or to attract any funds or deposits. Investments mentioned may not be suitable for all clients. Any product discussed herein may be purchased only after a client has carefully reviewed the prospectus and executed the subscription documents. The Dealers have not considered the actual or desired investment objectives, goals, strategies, guidelines, or factual circumstances of any investor in any fund(s). Before making any investment, each investor should carefully consider the risks associated with the investment, as discussed in the applicable prospectus, and make a determination based upon their own particular circumstances, that the investment is consistent with their investment objectives and risk tolerance. Alternative investments often are speculative and include a high degree of risk. Investors could lose all or a substantial amount of their investment. Alternative investments are suitable only for eligible, long-term investors who are willing to forgo liquidity and put capital at risk for an indefinite period of time. They may be highly illiquid and can engage in leverage and other speculative practices that may increase the volatility and risk of loss. Alternative Investments typically have higher fees than traditional investments. Investors should carefully review and consider potential risks before investing. All expressions of opinion are subject to change without notice and are not intended to be a forecast of future events or results. Further, opinions expressed herein may differ from the opinions expressed by a Dealer and/or other businesses/affiliates of a Dealer. This is not a research report as defined by NASD Conduct Rule 2711 and was not prepared by the Research Departments of a Dealer or its affiliates. Past performance is no guarantee of future results. Actual results may vary. Diversification does not assure a profit or protect against loss in a declining market. Alternative investments involve complex tax structures, tax inefficient investing, and delays in distributing important tax information. Individual funds have specific risks related to their investment programs that will vary from fund to fund. Clients should consult their own tax and legal advisors as Dealer does not provide tax or legal advice. Interests in alternative investment products are offered pursuant to the terms of the applicable prospectus, are distributed by the applicable Dealer and certain of its affiliates, and (1) are not FDIC-insured, (2) are not deposits or other obligations of such Dealer or any of its affiliates, (3) are not guaranteed by such Dealer and its affiliates, and (4) involve investment risks, including possible loss of principal. Each Dealer is a registered broker-dealer, not a bank. For more information, please contact your financial advisor. Or visit www.breit.com
www.breit.com Blackstone Advisory Partners L.P., Dealer Manager / Member FINRA BREIT-6-1017