Blackstone Real Estate Income Trust, Inc.
BSTT DEF 14A Report ended July 11, 2024
BLACKSTONE REAL ESTATE INCOME TRUST, INC.
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No.)
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
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☐
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Preliminary Proxy Statement
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☐
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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☒
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Definitive Proxy Statement
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☐
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Definitive Additional Materials
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☐
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Soliciting Material Pursuant to §240.14a-12
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Blackstone Real Estate Income Trust, Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box)
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☒
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No fee required.
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☐
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Fee paid previously with preliminary materials.
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☐
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Blackstone
345 Park Avenue
New York, New York 10154
Dear Stockholders:
You are cordially invited to participate in the 2024 Annual Meeting of Stockholders (the “Annual
Meeting”) of Blackstone Real Estate Income Trust, Inc., a Maryland corporation (the
“Company”), which will be held as a “virtual meeting” via live webcast on July 11, 2024 at 8:00
a.m., Eastern Time.
AT THE ANNUAL MEETING, STOCKHOLDERS WILL BE ASKED TO CONSIDER AND VOTE
UPON:
■
the election of nine director nominees listed in the Proxy Statement;
■
the ratification of the appointment of Deloitte & Touche LLP as our independent
registered public accounting firm for the year ending December 31, 2024; and
■
such other business as may properly come before the Annual Meeting and any
adjournments or postponements thereof.
Details concerning those matters to come before stockholders at the Annual Meeting are
described in this Proxy Statement.
For the 2024 Annual Meeting, the Company will make a charitable donation for every
stockholder that votes to the Navy SEAL Foundation. The Navy SEAL Foundation is a non-profit
organization that provides support and assistance to the Naval Special Warfare community and
its families. The Navy SEAL Foundation provides a comprehensive set of programs specifically
designed to improve health and welfare, build and enhance resiliency, empower and educate
families and provide critical support during times of illness, injury, loss and transition.
Management and the Board of Directors unanimously recommend that you vote FOR all
nominees for directors listed in the Proxy Statement and FOR the appointment of Deloitte &
Touche LLP as our independent registered public accounting firm for the year ending December
31, 2024.
It is important that your shares be represented at the Annual Meeting and voted in
accordance with your wishes. Whether or not you plan to participate at the Annual
Meeting, we urge you to complete a proxy as promptly as possible — by Internet,
telephone or mail — so that your shares will be voted at the Annual Meeting. This will not
limit your right to vote or to participate at the Annual Meeting.
On behalf of the Board of Directors and management, I thank you for your continuing support.
Sincerely,
Frank Cohen
Chairperson of the Board
and Chief Executive Officer
April 22, 2024
IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 11, 2024:
Our Proxy Statement, form of proxy card and 2023 Annual Report to stockholders are also available at
www.proxyvote.com/
BREIT
, and can be accessed by using the 16-digit control number and following the instructions located on the enclosed
proxy card.
Blackstone
345 Park Avenue
New York, New York 10154
Dear Stockholders:
We hereby notify you that Blackstone Real Estate Income Trust, Inc., a Maryland corporation
(the “Company”), is holding its 2024 Annual Meeting of Stockholders (the “Annual Meeting”) as a
“virtual meeting” via live webcast on July 11, 2024 at 8:00 a.m., Eastern Time. Stockholders as
of the April 12, 2024 record date who wish to participate in the virtual Annual Meeting may do so
by visiting the web portal located at
www.virtualshareholdermeeting.com/BREIT2024
and
entering the 16-digit control number found on their proxy card or voting instruction form
previously sent. Technical assistance will be available for stockholders encountering any
difficulties accessing the virtual Annual Meeting. The technical support contact information will
appear on the meeting website prior to the start of the Annual Meeting.
AT THE ANNUAL MEETING, STOCKHOLDERS WILL BE ASKED TO CONSIDER AND VOTE
UPON:
1.
the election of nine director nominees listed in the Proxy Statement;
2.
the ratification of the appointment of Deloitte & Touche LLP as our independent
registered public accounting firm for the year ending December 31, 2024; and
3.
such other business as may properly come before the Annual Meeting and any
adjournments or postponements thereof.
You can vote your shares of common stock at the Annual Meeting and any adjournments or
postponements thereof if the Company’s records show that you were a stockholder of record as
of the close of business on April 12, 2024, the record date for the Annual Meeting.
To express our appreciation for your participation, the Company will make a charitable donation
to the Navy SEAL Foundation on behalf of every stockholder that votes.
Stockholders, whether or not they expect to be present at the Annual Meeting, are requested to
authorize a proxy to vote their shares electronically via the Internet, by telephone or by
completing and returning the proxy card. Voting instructions are printed on your proxy card and
included in the accompanying Proxy Statement. Any person giving a proxy has the power to
revoke it at any time prior to the Annual Meeting and stockholders who participate at the Annual
Meeting may withdraw their proxies and vote online.
Sincerely,
Leon Volchyok
Chief Legal Officer
and Secretary
April 22, 2024
This Notice of Annual Meeting and the accompanying Proxy Statement are being distributed or
made available, as the case may be, on or about April 22, 2024.
NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
Vote by:
Phone, web or mail
Location:
www.virtualshareholdermeeting.co
m/BREIT2024
Date & Time:
Tuesday, July 11, 2024
8:00AM EDT
Record Date:
April 12, 2024
Table of Contents
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Page
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Proposal 1 — Election of Directors
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Nominees for Election as Directors
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The Board of Directors and Committees
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Corporate Governance
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Executive and Senior Officers
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Compensation of Directors and Executive Officers
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Executive Officer Compensation
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Non-Employee Director Compensation
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Equity Compensation Plan Information
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Security Ownership of Certain Beneficial Owners and Management
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Transactions with Related Persons and Certain Control Persons
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Our Relationship with Our Adviser and Blackstone
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Indemnification Agreements with Directors and Officers
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Conflicts of Interest with the Adviser and its Affiliates
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Related Party Transaction Policies
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Report of the Affiliate Transaction Committee
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Audit and Non-Audit Fees
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Audit Committee Pre-Approval Policies and Procedures
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General Information About The Annual Meeting and Voting
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Audit Committee Report
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Annual Report
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Other Matters
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Stockholder Proposals for the 2025 Annual Meeting
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Householding of Proxy Materials
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The words “Blackstone Real Estate Income Trust,” “BREIT,” “we,” “our,” “us,” and the “Company” 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. The terms “BX REIT Advisors” and the
“Adviser” each refer to BX REIT Advisors L.L.C., our adviser. The Adviser is part of the real estate group (“Blackstone Real Estate”) of
Blackstone Inc. (together with its affiliates, “Blackstone”), a leading global investment manager. Blackstone Real Estate serves as our
sponsor.
Web links throughout this document are provided for convenience only, and the content on the referenced websites does not constitute
a part of this Proxy Statement.
Proposal 1 — Election of Directors
There are currently nine members of the Board of Directors. On March 7, 2024, the Board of Directors, upon recommendation of its
Nominating and Corporate Governance Committee, unanimously nominated the nine directors listed below for re-election to the Board of
Directors at the Annual Meeting. All of the nominees are willing to serve as directors but, if any of them should decline or be unable to act
as a director, the individuals designated in the proxy cards as proxies will exercise the discretionary authority provided to vote for the
election of such substitute nominee selected by our Board of Directors, unless the Board of Directors acts to reduce the size of the Board of
Directors in accordance with our bylaws. The Board of Directors has no reason to believe that any such nominees will be unable or unwilling
to serve.
Nominees for Election as Directors
The names, ages as of April 1, 2024 and existing positions with us of the nominees are as follows:
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Name
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Age
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Position
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Frank Cohen
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51
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Chairperson of the Board and Chief Executive Officer
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Robert Harper
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45
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President and Director
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Wesley LePatner
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42
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Chief Operating Officer and Director
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Brian Kim
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44
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Head of Acquisitions and Capital Markets and Director
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Raymond J. Beier
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67
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Independent Director
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Susan Carras
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69
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Independent Director
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Richard I. Gilchrist
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78
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Independent Director
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Field Griffith
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70
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Independent Director
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Edward Lewis
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83
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Independent Director
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The name, principal occupation for the last five years, selected biographical information and the period of service as our director of each of
the nominees are set forth below.
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Frank Cohen
Chairperson of the Board
and Chief Executive Officer
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Age: 51
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Director Since:
2016
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Committees:
None
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Biographical Information
: Mr. Cohen has been Chairperson of the Board and the Chief Executive Officer of the Company since July
2016. He is a Senior Managing Director with Blackstone Real Estate, the Global Chairperson of Blackstone Real Estate’s Global Core+
business and a member of Blackstone Real Estate’s Investment Committee. Since joining Blackstone in 1996, Mr. Cohen has been
involved in over $100 billion of real estate transactions. He has been involved with many of Blackstone’s notable investments, including
EQ Office, CarrAmerica Realty, Trizec Properties and IndCor Properties.
Qualifications
: Mr. Cohen received a BA from Northwestern University, where he graduated from the Honors Program in Mathematical
Methods in the Social Sciences, with a double major in political science. Mr. Cohen has served as a director of Tricon Residential Inc.
(TSX: TCN) since September 2020. He serves as a director for several private Blackstone portfolio companies, including EQ Office, and
served as a director for Hudson Pacific Properties (NYSE: HPP) from 2015 until 2017. He is also a trustee of the Urban Land Institute
and serves on the Advisory Board of Governors for the National Association of Real Estate Investment Trusts (“NAREIT”), on the Board
of the Regional Plan Association and on the Board of Trustees at Northwestern University. Mr. Cohen is a valuable member of our Board
of Directors because of his vast real estate experience, his history with Blackstone and his leadership within Blackstone Real Estate’s
Global Core+ business.
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2024 Proxy Statement
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1
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Robert Harper
President and Director
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Age: 45
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Director Since:
2023
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Committees:
None
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Biographical Information
: Mr. Harper has served as a director and the Company’s President since August 2023. Previously, Mr. Harper
was the Head of Asset Management of the Company from August 2016 to August 2023. He is a Senior Managing Director and the Head
of Real Estate Asset Management Americas for Blackstone. Since joining Blackstone in 2002, Mr. Harper has been involved in analyzing
Blackstone’s real estate equity and debt investments in all property types. Mr. Harper has previously worked for Blackstone in Los
Angeles and London, where he served as Head of Europe for the Blackstone Real Estate Debt Strategies business. Mr. Harper currently
serves as a board member for the Global Heritage Fund and the McIntire School of Commerce Foundation Board at the University of
Virginia. Mr. Harper has served as a director of Invitation Homes, Inc. from January 2017 to May 2020, of ESH Hospitality, Inc. from
September 2016 to May 2017, of Park Hotels & Resorts Inc. from January 2017 to December 2017 and of Extended Stay America, Inc.
from September 2016 to May 2017. Prior to joining Blackstone, Mr. Harper worked for Morgan Stanley’s real estate private equity group
in Los Angeles and San Francisco.
Qualifications
: Mr. Harper received a BS from the McIntire School of Commerce at the University of Virginia. Mr. Harper is a valuable
member of our Board of Directors because of his vast real estate experience, his history with Blackstone and BREIT, and his leadership
within Blackstone Real Estate’s business.
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Wesley LePatner
Chief Operating Officer and Director
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Age: 42
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Director Since:
2016
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Committees:
None
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Biographical Information
: Ms. LePatner has been a director and the Chief Operating Officer of the Company since July 2016. She is a
Senior Managing Director with Blackstone Real Estate and the Global Head of Blackstone Real Estate’s Global Core+ business as well
as a member of Blackstone Real Estate’s Investment Committee. Prior to joining Blackstone in 2014, Ms. LePatner spent over a decade
at Goldman Sachs.
Qualifications
: Ms. LePatner received a BA in History from Yale University, summa cum laude and Phi Beta Kappa. Ms. LePatner is a
valuable member of our Board of Directors because of her extensive real estate experience, her history with Blackstone and BREIT, and
her leadership within Blackstone Real Estate’s Global Core+ business.
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Brian Kim
Head of Acquisitions & Capital Markets
and Director
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Age: 44
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Director Since:
2021
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Committees:
None
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Biographical Information
: Mr. Kim has been the Head of Acquisitions and Capital Markets of the Company since January 2017 and a
director of the Company since January 2021. He is a Senior Managing Director with Blackstone Real Estate and the Global Chief
Operating Officer of Blackstone Real Estate’s Global Core+ real estate business. Since joining Blackstone in 2008, Mr. Kim has played a
key role in a number of Blackstone’s investments including the take private and subsequent sale of Strategic Hotels & Resorts, the
acquisition of Peter Cooper Village / Stuyvesant Town and the creation of BRE Select Hotels Corp., Blackstone’s select service hotel
platform. Prior to joining Blackstone, Mr. Kim worked at Apollo Real Estate Advisors, Max Capital Management Corp. and Credit Suisse
First Boston. Mr. Kim served as a board member of CorePoint Lodging Inc. (NYSE: CPLG) from November 2015 to March 2022.
Qualifications
: Mr. Kim received an AB in Biology from Harvard College where he graduated with honors. Mr. Kim is a valuable member
of our Board of Directors because of his extensive real estate and investment experience, his history with Blackstone and his leadership
within the Company.
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2
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Blackstone Real Estate Income Trust
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Raymond J. Beier
Independent Director
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Age: 67
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Director Since:
2016
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Committees:
Affiliate Transaction, Audit (Chairperson), and Compensation
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Biographical Information
: Mr. Beier has been a director of the Company since July 2016. He has served as a director to Blackstone
Private Equity Strategies Fund L.P. since July 2022. He was a Partner in the financial services practice at PricewaterhouseCoopers LLP,
having been with the firm from 1993 to 2016. Mr. Beier has extensive experience in financial reporting matters relating to mergers,
acquisitions and corporate finance transactions. Mr. Beier served in a variety of roles at PricewaterhouseCoopers LLP, including as a
member of the National Office leadership team responsible for its strategic policy and analysis group and as a Senior Partner in the
transaction services group. Mr. Beier also served on various PricewaterhouseCoopers committees, including the Global Private Equity
Committee and the Extended Leadership Committee.
Qualifications
: Mr. Beier received a BS in Accounting, summa cum laude, from the University of Minnesota—Duluth and an MBA from
the University of Minnesota—Carlson School of Management. Mr. Beier also serves on the Chancellor’s Advisory Board at the University
of Minnesota—Duluth. Mr. Beier is a valuable member of our Board of Directors because of his extensive experience with accounting and
financial reporting matters, especially relating to mergers, acquisitions and corporate finance transactions.
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Susan Carras
Independent Director
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Age: 69
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Director Since:
2021
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Committees:
Affiliate Transaction, Audit, and Nominating & Corporate Governance
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Biographical Information
: Ms. Carras has been a director of the Company since January 2021. She is a Senior Managing Director in
the Washington, DC office of JLL Capital Markets, America. Ms. Carras served as Co-Head of HFF’s Washington, DC office from 2011 to
2019 and she joined JLL as part of JLL’s 2019 acquisition of HFF. Prior to HFF, she was a Principal and Managing Director at
Sonnenblick Goldman where she served on the operating committee and headed offices in Washington, DC and Tampa, FL. Earlier in her
career, she was with the Real Estate Finance Division of Chase Manhattan Bank.
Qualifications
: Ms. Carras received a BA, magna cum laude with departmental honors, from Lafayette College and a Diploma in Real
Estate Analysis and Appraisal from New York University. She is a trustee emerita of Lafayette College and previously chaired the
Development and Alumni Relations Committee, served on the Executive Committee and was a member of the search committee for
Lafayette’s 16th president. Together with a fellow trustee, Ms. Carras started the First Women of Lafayette Scholarship Fund. Ms. Carras
is a past Chair of the Board of Trustees of the McLean School of Maryland. In September 2023, Ms. Carras was appointed as an
independent director to the Board of Trustees of Elme Communities (NYSE: ELME). She is active in the Urban Land Institute serving on
the UDMUC Blue Council and on the Washington Full Member Engagement Committee. She is a past recipient of the Greater
Washington Commercial Association of Realtors Top Financing Award and Top Sales Award for the Washington, DC Metro and has been
recognized by Real Estate Forum as a Women of Influence, by Bisnow as a Women of Influence in Commercial Real Estate and by
Connect Media’s Women in Real Estate. Ms. Carras is a valuable member of our Board of Directors because of her significant
experience in the real estate industry.
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2024 Proxy Statement
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3
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Richard I. Gilchrist
Independent Director
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Age: 78
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Director Since:
2016
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Committees:
Affiliate Transaction (Chairperson), Audit, and Nominating & Corporate Governance
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Biographical Information
: Mr. Gilchrist has been a director of the Company since July 2016. He served as Senior Advisor for
acquisitions and investments at The Irvine Company, a privately-held real estate investment company, a position he held from July 2011
until July 2018, after having served as President of its Investment Properties Group from 2006 to 2011. He served as President and Co-
Chief Executive Officer and on the board of directors of Maguire Properties, Inc., a publicly-held REIT, from 2002 to 2006. From 1997 to
2001, Mr. Gilchrist served as Chief Executive Officer, President and member of the board of directors of Commonwealth Atlantic
Properties, a privately-held REIT. From 1995 to 1997, he served as the Co-Chairman and Managing Partner of CommonWealth Partners,
a private real estate company he co-founded. He currently serves as Chairman of the Board and on the compensation committee of Spirit
Realty Capital, Inc. (NYSE: SRC). He has previously served as a director of Ventas (NYSE: VTR) from 2011 to August 2021 and was a
Chairman of both its Compensation and Investment committees. He has also previously served as a director of BioMed Realty Trust, Inc.
(NYSE: BMR) from 2007 to 2014, Nationwide Health Properties, Inc. from 2008 to 2011, and TIER REIT, Inc. (NYSE: TIER) from 2013 to
August 2019, and as Chairman from 2016 to August 2019 until TIER REIT, Inc. was acquired by Cousins Properties Inc. (NYSE: CUZ).
Qualifications
: Mr. Gilchrist is a member emeritus of the Whittier College Board of Trustees and served as its Chairman from 2003 to
2011 where he received his BA in 1968. He is also a member of the Advisory Board of the University of California, Los Angeles Law
School, where he earned a JD in 1971. Mr. Gilchrist is a valuable member of our Board of Directors and has a unique insight into our
investment activities because of his extensive experience in the real estate industry, including having served as an executive officer of
several REITs, his knowledge and experience in internal and external risk oversight, and his experience as a member of the board of
directors of four public REITs.
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Field Griffith
Independent Director
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Age: 70
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Director Since:
2016
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Committees:
Affiliate Transaction, Compensation (Chairperson), and Nominating & Corporate
Governance
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Biographical Information
: Mr. Griffith has been a director of the Company since July 2016. He also currently serves as a non-executive
director on the board of The Forest Company Limited and as a director for the Prime Property Fund LLC, positions he has held since
March 2017 and February 2018, respectively. Mr. Griffith was most recently employed full time as the Director of Real Assets Investments
for the Virginia Retirement System from 2004 to 2016 where he was responsible for managing all aspects of the System’s global real
estate, infrastructure and natural resource portfolios. The global real estate portfolio consisted of publicly- and privately-traded equity and
debt investments in the form of separate accounts, joint ventures, closed-end funds and open-end funds. Mr. Griffith was also a member
of the management committee of the Virginia Retirement System. From 1999 to 2004, he was a senior executive at Gemini Rosemont
Commercial Real Estate where he was engaged in real estate portfolio management activities. From 1985 to 1999, Mr. Griffith was
employed in the real estate investment group for UNUM Life Insurance Company engaged in mortgage and equity underwriting,
structuring, property acquisitions/dispositions and portfolio management of the commercial real estate equity group. From 1983 to 1985,
he worked in the real estate investment group at Phoenix Home Life Insurance Company.
Qualifications
: Mr. Griffith is a Chartered Financial Analyst and received a BA from Beloit College and an MBA from the University of
Washington. From 2007 to 2013, he served as a board member of the Pension Real Estate Association. From August 2017 to March
2021, he served on the board of directors of Tedford Housing, Inc., a non-profit organization focused on serving the regional homeless
population. Mr. Griffith is a valuable member of our Board of Directors because of his extensive experience with real estate investments.
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4
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Blackstone Real Estate Income Trust
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Field Griffith
Independent Director
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Age: 70
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Director Since:
2016
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Committees:
Affiliate Transaction, Compensation (Chairperson), and Nominating & Corporate
Governance
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Biographical Information
: Mr. Griffith has been a director of the Company since July 2016. He also currently serves as a non-executive
director on the board of The Forest Company Limited and as a director for the Prime Property Fund LLC, positions he has held since
March 2017 and February 2018, respectively. Mr. Griffith was most recently employed full time as the Director of Real Assets Investments
for the Virginia Retirement System from 2004 to 2016 where he was responsible for managing all aspects of the System’s global real
estate, infrastructure and natural resource portfolios. The global real estate portfolio consisted of publicly- and privately-traded equity and
debt investments in the form of separate accounts, joint ventures, closed-end funds and open-end funds. Mr. Griffith was also a member
of the management committee of the Virginia Retirement System. From 1999 to 2004, he was a senior executive at Gemini Rosemont
Commercial Real Estate where he was engaged in real estate portfolio management activities. From 1985 to 1999, Mr. Griffith was
employed in the real estate investment group for UNUM Life Insurance Company engaged in mortgage and equity underwriting,
structuring, property acquisitions/dispositions and portfolio management of the commercial real estate equity group. From 1983 to 1985,
he worked in the real estate investment group at Phoenix Home Life Insurance Company.
Qualifications
: Mr. Griffith is a Chartered Financial Analyst and received a BA from Beloit College and an MBA from the University of
Washington. From 2007 to 2013, he served as a board member of the Pension Real Estate Association. From August 2017 to March
2021, he served on the board of directors of Tedford Housing, Inc., a non-profit organization focused on serving the regional homeless
population. Mr. Griffith is a valuable member of our Board of Directors because of his extensive experience with real estate investments.
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Edward Lewis
Independent Director
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Age: 83
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Director Since:
2016
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Committees:
Affiliate Transaction, Audit, Compensation, and Nominating & Corporate Governance
(Chairperson)
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Biographical Information
: Mr. Lewis has been a director of the Company since July 2016. From 2000 until February 2017, he was
Senior Advisor to Solera Capital, a private equity firm. In 1969, he co-founded Essence Communications Partners, a multimedia company
targeting African-American women, serving as Chief Executive Officer, Publisher and Chairman for 35 years. Previously, he served on the
boards of Great Atlantic & Pacific Tea Company, Inc. (NYSE: GAP), the Apollo Theater Foundation, the Boys and Girls Clubs of America
and the Economic Club of New York. He also served as Chairman of the Magazine Publishers of America from 1997 to 1999, becoming
the first African-American to hold this position in the 75-year history of the organization.
Qualifications
: Mr. Lewis received a BA and MA in Political Science and International Affairs from the University of New Mexico. Mr.
Lewis is a valuable member of our Board of Directors because of his extensive business experience as Founder and Chairman of
Essence Communications, as well as the skills he gained during his active board service to a number of diverse organizations.
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2024 Proxy Statement
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5
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VOTING RECOMMENDATION
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF EACH OF THE
DIRECTOR NOMINEES NAMED ABOVE.
The Board of Directors and Committees
Our business is managed by our Adviser, subject to the oversight and direction of our Board of Directors. Our Board of Directors has nine
members and is currently composed of Messrs. Cohen, Harper, Kim, Beier, Gilchrist, Griffith and Lewis and Mmes. LePatner and Carras.
Director Independence
Our Corporate Governance Guidelines and committee charters require a majority of the members of our Board of Directors, and all
members of our Audit Committee, Affiliate Transaction Committee, Compensation Committee and Nominating and Corporate Governance
Committee, to be “independent” directors in accordance with the criteria in our charter, bylaws, the applicable rules of the Securities and
Exchange Commission (the “SEC”) and the listing standards of the New York Stock Exchange (“NYSE”). Based upon its review, our Board
of Directors has affirmatively determined that each of Messrs. Beier, Gilchrist, Griffith and Lewis and Ms. Carras are “independent”
members of our Board of Directors under all applicable standards for independence, including with respect to committee service on our
Audit Committee, Affiliate Transaction Committee, Compensation Committee and Nominating and Corporate Governance Committee.
Our charter provides that a majority of our directors must be independent directors, except for a period of up to 60 days after the death,
removal or resignation of an independent director pending the election of a successor independent director. Our charter defines an
independent director as a director who is not and has not for the last two years been associated, directly or indirectly, with Blackstone Real
Estate or our Adviser. Pursuant to our charter and the policy adopted by our Board of Directors with respect to certain charter provisions, a
director is deemed to be associated with Blackstone Real Estate or our Adviser if he or she owns, or has owned in the last two years, any
interest (other than ownership of an interest that was (a) divested before appointment to our Board of Directors and (b) de minimis relative
to its owner’s net worth) in, is employed by, is an officer or director of, or has any material business or professional relationship with
Blackstone Real Estate, our Adviser or any of their affiliates, performs services (other than as a director) for us, or serves as a director or
trustee for more than three REITs sponsored by Blackstone Real Estate or advised by our Adviser. A business or professional relationship
will be deemed material per se if the gross income derived by the director from Blackstone Real Estate, the Adviser or any of their affiliates
exceeds 5% of (1) the director’s annual gross income derived from all sources during either of the last two years or (2) the director’s net
worth on a fair market value basis. An indirect association is defined to include circumstances in which the director’s spouse, parents,
children, siblings, mothers- or fathers-in-law, sons- or daughters-in-law or brothers- or sisters-in-law is or has been associated with
Blackstone Real Estate, our Adviser or any of their affiliates or us.
Board of Directors Composition
The Board of Directors seeks to ensure that it is composed of members whose particular experience, qualifications, attributes and skills,
when taken together, will allow it to satisfy its oversight responsibilities effectively. In that regard, the Nominating and Corporate
Governance Committee is responsible for recommending candidates for directorships to be elected at each annual meeting or to fill
vacancies or newly created directorships that occur between meetings. Only independent directors may nominate replacements for
vacancies in the independent director positions. In identifying candidates, the Nominating and Corporate Governance Committee will review
all nominees for director in accordance with the requirements and qualifications contained in the Company’s Corporate Governance
Guidelines and recommend that the Board of Directors select those nominees whose attributes the Nominating and Corporate Governance
Committee believes would be most beneficial to us. In identifying candidates for membership on the Board of Directors, the Nominating and
Corporate Governance Committee takes into account (i) minimum individual qualifications, such as personal integrity and moral character,
willingness to apply sound business judgment, industry knowledge or experience and an ability to work collegially with the other members of
the Board of Directors and (ii) any other factors it considers appropriate. While our Corporate Governance Guidelines do not include an
express diversity policy, one factor that the Board of Directors and Nominating and Corporate Governance Committee consider is the
importance to the Company of racial and gender diversity in board composition. The Board of Directors and Nominating and Corporate
Governance Committee also consider candidates’ diversity of experiences.
Director nominees may be nominated by our stockholders in accordance with the advance notice requirements contained in our bylaws. See
“Stockholder Proposals for the 2025 Annual Meeting” for more information regarding the advance notice requirements contained in our
bylaws. Our Board of Directors also will consider recommendations made by our stockholders. See “Corporate Governance—Stockholder
Nominations and Communications Policy” for more information with respect to the consideration of candidates recommended by
stockholders for election as directors.
Our Board of Directors currently has four standing committees: an Audit Committee, a Compensation Committee, a Nominating and
Corporate Governance Committee and an Affiliate Transaction Committee. The current written charters for each of these committees are
available on our website,
www.breit.com
.
Audit Committee
The Audit Committee is currently composed of Messrs. Beier, Gilchrist and Lewis and Ms. Carras, with Mr. Beier serving as the committee’s
Chairperson. All Audit Committee members are “independent,” consistent with the qualifications set forth in the listing standards of the
NYSE, our charter and Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), applicable to boards of
directors in general and audit committees in particular. Mr. Beier is qualified as an audit committee financial expert within the meaning of
Item 407(d)(5) of Regulation S-K under the Exchange Act. The Audit Committee’s primary duties are described in the Audit Committee
charter and include:
■
appointing, retaining, determining the compensation of, overseeing, evaluating and, where appropriate, replacing our independent
registered public accounting firm, including overseeing the qualifications and independence of our independent auditors;
■
assisting the Board of Directors in overseeing our accounting and financial reporting processes;
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overseeing the quality and integrity of the Company’s financial statements and internal controls, including audits of our financial
statements;
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assisting the Board of Directors in overseeing the performance of our internal and independent auditors;
■
assisting with the Company’s compliance with legal and regulatory requirements applicable to financial statements and accounting and
financial reporting and overall risk management profile, including with respect to sustainability and climate change risks as they relate to
financial risk exposures;
■
overseeing the Company’s IT security program; and
■
preparing the report of the Audit Committee required by the rules of the SEC to be included in the Company’s annual stockholders’
meeting proxy statement.
The Audit Committee has adopted procedures for the processing of complaints relating to accounting, internal control and auditing matters.
The Audit Committee oversees the review and handling of any complaints submitted pursuant to the foregoing procedures and of any
whistleblower complaints subject to Section 21F of the Exchange Act.
Affiliate Transaction Committee
The Affiliate Transaction Committee is currently composed of Messrs. Beier, Gilchrist, Griffith and Lewis and Ms. Carras with Mr. Gilchrist
serving as the committee’s Chairperson. All Affiliate Transaction Committee members are “independent,” consistent with the qualifications
set forth in our charter and the listing standards of the NYSE applicable to boards of directors. The primary purpose of the Affiliate
Transaction Committee is to review transactions between us and Blackstone or its affiliates (including our Adviser) or with other related
persons and to determine if the resolution of the conflict of interest is fair and reasonable to us and our stockholders.
The Affiliate Transaction Committee is responsible for reviewing and approving the terms of transactions between us and Blackstone or its
affiliates (including our Adviser) or any member of our Board of Directors, including (when applicable) the economic, structural and other
terms of all acquisitions and dispositions between us and Blackstone or its affiliates (including our Adviser). Generally, we may enter into
transactions with Blackstone, our Adviser, our directors, and their respective affiliates only if a majority of our Board of Directors, and a
majority of the Affiliate Transaction Committee (which is composed of all of our independent directors), not otherwise interested in the
transaction approve the transaction as being fair and reasonable to us. The Affiliate Transaction Committee is also responsible for reviewing
the Adviser’s performance and the fees and expenses paid by us to the Adviser and its affiliates.
Compensation Committee
The Compensation Committee is currently composed of Messrs. Beier, Griffith and Lewis, with Mr. Griffith serving as the committee’s
Chairperson. All Compensation Committee members are “independent,” consistent with the qualifications set forth in our charter and the
listing standards of the NYSE applicable to boards of directors in general and compensation committees in particular.
We are externally managed by the Adviser pursuant to an advisory agreement (the “Advisory Agreement”) and currently, we have no
employees other than the employees that are employed by certain of our portfolio entities, and none of whom are executive officers of the
Company or are involved in the management of the Company. We do not directly compensate our executive officers, or reimburse the
Adviser or its affiliates for the salaries, bonuses, benefits and severance payments for persons who also serve as our executive officers.
The Compensation Committee’s primary duties are described in its charter and include:
■
to the extent that we award compensation and/or any other employee benefits to our Chief Executive Officer, reviewing and approving
corporate goals and objectives relevant to the compensation of our Chief Executive Officer, evaluating the performance of our Chief
Executive Officer in light of those goals and objectives, and either as a committee or together with the other independent directors (as
directed by our Board of Directors) to determine and approve our Chief Executive Officer’s compensation based on this evaluation;
■
to the extent that the Company awards compensation and/or any other employee benefits to members of our management, other than
our Chief Executive Officer, considering the recommendations of the Chief Executive Officer with respect to such members of
managements’ compensation and determining and approving such compensation and/or other employee benefits or recommending that
the Board of Directors approve such compensation and/or other employee benefits;
■
to the extent that we award incentive compensation and/or equity-based compensation directly to our employees, if any, or the
employees of any external advisor, or to such advisor’s affiliates or any of their respective employees, reviewing and making
recommendations to our Board of Directors with respect to such incentive compensation plans and equity-based compensation plans or
any material changes to any such existing plans and discharging and administering its responsibilities under any such plans as required
by the terms thereof;
■
to the extent that we are required or elect to include a compensation discussion and analysis (“CD&A”) in our annual proxy statement,
overseeing the preparation of the CD&A and related disclosures for inclusion in our annual report or proxy statement in accordance with
the rules of the SEC;
■
to the extent that we are required or elect to include a CD&A in our annual proxy statement, preparing and approving any Compensation
Committee report required to be included in our annual report or proxy statement in accordance with applicable SEC regulations;
■
to the extent that we administer and/or manage executive compensation programs, periodically reviewing, as and when determined
appropriate, executive compensation programs and total compensation levels;
■
reviewing and making recommendations to our Board of Directors concerning compensation arrangements for members of our Board of
Directors who are not employees of the Company, the Adviser or any of its affiliates;
■
in consultation with management, overseeing regulatory compliance with respect to compensation matters;
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reviewing and approving any contracts or other arrangements with our current or former executive officers, including consulting
arrangements, employment contracts or severance or termination arrangements; and
■
performing any other duties or responsibilities expressly delegated to the Compensation Committee by our Board of Directors from time
to time relating to our compensation programs.
The Compensation Committee is entitled to the resources and authority appropriate to discharge its duties and responsibilities, including the
sole authority to retain, on terms it deems appropriate, legal counsel and other experts or consultants as it deems appropriate, without
obtaining the approval of our Board of Directors or management. The Compensation Committee has the sole authority to select and retain a
compensation consultant.
The Compensation Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the
committee. In particular, the committee may delegate the approval of certain transactions to a subcommittee consisting solely of members
of the Compensation Committee who are “Non-Employee Directors” for the purposes of Rule 16b-3 under the Exchange Act.
Compensation Committee Interlocks and Insider Participation
During 2023, the Compensation Committee was composed of Messrs. Beier, Griffith and Lewis, none of whom were officers or employees
of the Company during the fiscal year ended December 31, 2023, and none of whom had any relationship requiring disclosure by the
Company under Item 404 of Regulation S-K under the Exchange Act. None of our executive officers has served on the board of directors or
compensation committee of any other entity that has or has had one or more executive officers who served as a member of our Board of
Directors or our Compensation Committee during the fiscal year ended December 31, 2023.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is currently composed of Messrs. Gilchrist, Griffith and Lewis and Ms. Carras, with
Mr. Lewis serving as the committee’s Chairperson. All Nominating and Corporate Governance Committee members are “independent,”
consistent with the qualifications set forth in our charter and the listing standards of the NYSE.
Among other things, the Nominating and Corporate Governance Committee is responsible for (i) assisting our Board of Directors in
identifying individuals qualified to become members of our Board of Directors; (ii) recommending candidates to our Board of Directors to fill
vacancies on the Board of Directors; (iii) recommending committee assignments for directors to the full Board; (iv) periodically assessing
the performance of our Board of Directors; (v) overseeing and approving the management continuity planning process; (vi) reviewing and
monitoring the Board of Director’s oversight of the Company’s environmental, social and governance (“ESG”) reporting and disclosures and
related processes and controls; (vii) monitoring and overseeing the Board of Director’s oversight of the internal and external
communications regarding the Company’s position or approach to ESG matters; (viii) reviewing and recommending appropriate corporate
governance policies and procedures to our Board of Directors; (ix) overseeing the orientation of newly elected members of our Board of
Directors and any continuing education requirements set forth in the Corporate Governance Guidelines; and (x) reviewing and monitoring
our Code of Business Conduct and Ethics, and any other corporate governance policies and procedures we may have from time to time.
More specifically, the Nominating and Corporate Governance Committee is responsible for reviewing, on an annual basis, the requisite skills
and characteristics of individual members of the Board of Directors, as well as the composition of the Board of Directors as a whole, in the
context of our needs. The Nominating and Corporate Governance Committee will review all nominees for director, including those
recommended by stockholders, in accordance with requirements and qualifications set forth in our Corporate Governance Guidelines and
will recommend that the Board of Directors select those nominees whose attributes it believes would be most beneficial to us. This review
involves an assessment of the personal qualities and characteristics, accomplishments and business reputation of director candidates. The
Nominating and Corporate Governance Committee will assess candidates’ qualifications based on the following minimum criteria, which
may be modified from time to time by the Nominating and Corporate Governance Committee:
■
demonstrated personal integrity and moral character;
■
willingness to apply sound and independent business judgment for the long-term interests of stockholders;
■
relevant business or professional experience, technical expertise or specialized skills;
■
personality traits and background that appear to fit with those of the other directors to produce a collegial and cooperative board
responsive to the Company’s needs; and
■
ability to commit sufficient time to effectively carry out the substantial duties of a director.
In addition, each director is required to have at least three years of relevant experience demonstrating the knowledge and experience
required to successfully acquire and manage the type of assets being acquired by the Company, and at least one of the Independent
Directors shall have at least three years of relevant real estate experience.
Meetings
Directors are expected to attend board meetings and meetings of the committees on which they serve, to spend the time needed and to
meet as frequently as necessary, in order to discharge their responsibilities properly. Our Board of Directors conducts its business through
meetings of the Board of Directors, actions taken by written consent in lieu of meetings and by actions of its committees. During the year
ended December 31, 2023, the Board of Directors held 10 meetings, the Audit Committee held four meetings, the Affiliate Transaction
Committee held six meetings, the Compensation Committee held five meetings and the Nominating and Corporate Governance Committee
held three meetings. Each director attended at least 75% of the combined number of meetings of the Board of Directors and meetings of
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committees on which he or she served during the period in 2023 in which he or she served as a director or member of such committee, as
applicable.
We do not have a formal policy regarding attendance by directors at our annual meeting of stockholders but invite and encourage all
directors to attend. We make every effort to schedule our annual meeting of stockholders at a time and date to permit attendance by
directors, taking into account the directors’ schedules and the timing requirements of applicable law. All of our directors were present, in
person or telephonically, at our 2023 annual meeting of stockholders.
Executive Sessions
Our non-management directors regularly hold executive sessions at which management is not present. Our Corporate Governance
Guidelines provide that the presiding independent director, if any, or a director designated by the non-management directors shall serve as
such presiding director.
Board Leadership Structure and Role in Risk Oversight
Our Board of Directors has structured itself in a manner that it believes allows it to perform its oversight function effectively. A majority of our
directors are independent pursuant to the definition of independence established by our charter and the standards of the NYSE.
Frank Cohen currently serves as Chairperson of the Board of Directors and Chief Executive Officer. In his capacity as Chairperson of the
Board of Directors and Chief Executive Officer, Mr. Cohen leads the investment strategy of the Company and is responsible for managing
the day-to-day operations of the Company.
The Board of Directors determined that combining the Chief Executive Officer and Chairperson positions is the appropriate leadership
structure for the Company at this time. The Board of Directors is of the view that ‘‘one-size’’ does not fit all, the evidence does not
demonstrate that any one leadership structure is more effective at creating long-term stockholder value and the decision of whether to
combine or separate the positions of Chief Executive Officer and Chairperson will vary company to company and depend upon a company’s
particular circumstances at a given point in time. Accordingly, the Board of Directors carefully considers from time to time whether the Chief
Executive Officer and Chairperson positions should be combined based on what the Board of Directors believes is best for the Company
and its stockholders. The Company does not have a lead independent director.
As with every business, we confront and must manage various risks including financial and economic risks related to the performance of our
portfolio and how our investments have been financed. Pursuant to our charter and bylaws and the Maryland General Corporation Law, our
business and affairs are managed under the direction of our Board of Directors. Our Adviser is responsible for the day-to-day management
of risks we face, while our Board of Directors, as a whole and through its committees, has responsibility for establishing broad corporate
policies for our overall operation and for the direction and oversight of our risk management. Members of our Board of Directors keep
informed of our business by participating in meetings of our Board of Directors and its committees, by reviewing analyses, reports and other
materials provided to them by and through discussions with our Adviser and our executive officers.
In connection with their oversight of risks to our business, our Board of Directors and the Audit Committee consider feedback from our
Adviser concerning the risks related to our business, operations and strategies. The Audit Committee also assists the Board of Directors in
fulfilling its oversight responsibilities with respect to risk management in the areas of financial reporting, internal controls and compliance
with legal and regulatory requirements. The Affiliate Transaction Committee manages risks associated with the independence of the
independent directors and potential conflicts of interest involving our Adviser and its affiliates. The Compensation Committee and the
Nominating and Corporate Governance Committee assist the Board of Directors in fulfilling its oversight responsibilities with respect to the
management of risks arising from our compensation policies and programs and risks associated with board organization, membership and
structure, succession planning and corporate governance, respectively. Our compensation policies and practices, pursuant to which we pay
no cash compensation to our Adviser’s officers and employees since they are compensated by our Adviser or its affiliates, do not create
risks that are reasonably likely to have a material adverse effect on us. With respect to cybersecurity risk oversight, the Board of Directors
and/or the Audit Committee receive periodic reports and/or updates from management on the primary cybersecurity risks facing the
Company and our Adviser and the measures the Company and our Adviser are taking to mitigate such risks. In addition to such reports, the
Board of Directors and/or the Audit Committee receive updates from management as to changes to the Company’s and the Adviser’s
cybersecurity risk profile or certain newly identified risks.
Corporate Governance
Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics that applies to all of our directors and employees (if any), and to all of the officers
and employees of the Adviser, including our principal executive officer, principal financial officer, principal accounting officer or controller, or
persons performing similar functions. Our Code of Business Conduct and Ethics, as it relates to those also covered by Blackstone’s code of
conduct, operates in conjunction with, and in addition to, Blackstone’s code of conduct. Our Code of Business Conduct and Ethics is
designed to comply with SEC regulations relating to codes of conduct and ethics. Our Code of Business Conduct and Ethics is available on
our website,
www.breit.com
. The Company does not have a hedging policy for its officers, employees and directors at this time.
Any waiver of the Code of Business Conduct and Ethics may be made only by our Board of Directors or the Audit Committee and will be
promptly disclosed on our website set forth above rather than by filing a Current Report on Form 8-K. Any modifications to the Code of
Business Conduct and Ethics will also be reflected on such website.
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Corporate Governance Guidelines
We have also adopted Corporate Governance Guidelines to advance the functioning of our Board of Directors and its committees and to set
forth our Board of Directors’ expectations as to how it and they should perform its and their respective functions. Our Corporate Governance
Guidelines are available on our website,
www.breit.com
.
Stockholder Nominations and Communications Policy
Our Board of Directors has adopted policies with respect to the consideration of candidates recommended by stockholders for election as
directors and stockholder and interested-party communications with the Board of Directors.
Interested parties, including stockholders, may communicate with the Board of Directors or any of its directors, and stockholders may also
recommend director nominees for consideration by the Nominating and Corporate Governance Committee by directing the applicable
communication in writing to our Secretary at: Secretary, Stockholder Communications / Stockholder Nominations, Blackstone Real Estate
Income Trust, Inc., 345 Park Avenue, New York, New York 10154. The sender should indicate in the address whether it is intended for the
entire Board of Directors, a committee of the Board of Directors or an individual director. Each communication will be forwarded to the
intended recipients in accordance with the instructions provided.
Stockholder recommendations for nomination should include the name of the candidate, a current resume and curriculum vitae of the
candidate and a statement describing the candidate’s qualifications and contact information for personal and professional references. The
submission should also include the name and address of the stockholder who is recommending the nominee, the number of shares that are
owned of record or beneficially by the submitting stockholder and a description of all arrangements or understandings between the
submitting stockholder and the candidate. Director nominees may be nominated by our stockholders in accordance with our bylaws and the
advance notice requirements contained in our bylaws. See “Stockholder Proposals for the 2025 Annual Meeting” for more information
regarding the advance notice requirements contained in our bylaws.
Environmental, Social and Governance
BREIT is a non-listed, perpetual-life real estate investment program that invests primarily in stabilized income-generating commercial real
estate in the United States, and to a lesser extent, outside the United States. BREIT also selectively invests in real estate debt investments
to provide current income and, alongside its credit facilities and operating cash flow, serve as an additional source of liquidity for cash
management, satisfying stock repurchases under the share repurchase plan and other purposes. We are committed to responsibly
managing risk and preserving value for our shareholders. We strive to consider certain environmental, social and governance ("ESG")
factors relevant to our potential investments when making capital allocation decisions and incorporate ESG diligence practices as part of
our investment process, where applicable.
As an externally managed company, BREIT’s day-to-day operations are managed by our Adviser under the oversight of our Board of
Directors, and BREIT does not have any employees. Our executive officers are senior Blackstone Real Estate professionals and our Adviser
is a subsidiary of Blackstone and part of Blackstone Real Estate.
As such, many of the ESG initiatives undertaken by Blackstone may be relevant to our business and certain of the business decisions made
on our behalf by employees of our Adviser to deliver strong returns for our investors. Blackstone’s investors have relied on Blackstone’s
relentless commitment to excellence for nearly 40 years. Blackstone’s ESG efforts are anchored in its goal of generating strong returns for
investors to fulfil its fiduciary duty. Blackstone’s integrated team includes dedicated coverage at the firm level and at individual business
units, including Blackstone Real Estate.
Key ESG initiatives we share with Blackstone include the consideration of relevant ESG factors in the investment process where applicable,
dedicated resources to ESG governance and oversight, industry engagement on ESG matters, corporate sustainability and environmental
performance improvements at our office locations, and certain employee and community engagement and diversity, equity and inclusion
programs.
Social
Human Capital Management
■
Blackstone is committed to providing equal employment opportunities to all employees and applicants for employment without regard to
any class or status protected by federal, state or local laws. This policy also applies to all terms and conditions of employment.
■
Blackstone has a comprehensive anti-harassment policy and administers a “Respect at Work” training program for new hires globally
each year, which equips employees to foster diversity, prevent and respond to sexual harassment, create a respectful workplace
environment, and prevent discrimination and retaliation, among other topics.
■
All employees may request reasonable accommodations at the office if required due to a disability, religious requirement, pregnancy,
childbirth, or a related medical or common condition related to pregnancy or childbirth, or domestic violence, a sex offense or stalking.
■
Blackstone also has an established non-retaliation policy, which is intended to create an environment where employees can act without
fear of reprisal or retaliation.
■
BREIT has adopted a whistleblower policy, which sets forth procedures for the making of anonymous reports regarding accounting and
other legal and regulatory matters and provides for the protection of anyone making such a report. A summary of the policy is available
on our website,
www.breit.com
, under the “Why Invest in BREIT” tab by selecting “BREIT Leadership Corporate Governance” (the
“Policy on Reporting of Concerns Regarding Accounting and Other Matters”).
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Blackstone believes a workforce reflecting a breadth of backgrounds and experiences makes Blackstone a better investor and a better
firm. Blackstone’s diversity, equity and inclusion strategy leverages a people-driven framework based on four key pillars: recruiting, talent
development, community and inclusion and accountability. Blackstone believes that by focusing on each of these pillars and investing in
its people and its culture, Blackstone will create an inclusive environment that helps expand our access to the best available talent and
drives retention and advancement opportunities for our employees.
■
Blackstone believes that people do their best work when they are supported by a strong sense of community and belonging.
Blackstone’s employee affinity networks, which are open to all employees, serve as a platform for our professionals to expand cultural
awareness and connect to other employees, including through speaker series, professional development panels and social events.
Blackstone affinity networks seek to engage, retain and develop our existing population of employees, and over 1,600 Blackstone
employees were engaged in affinity networks globally as of April 2023.
■
Blackstone’s Future Women Leaders Program and Diverse Leaders Program introduce talented undergraduate students to financial
services and Blackstone through seminars, technical training, networking events and mentorship.
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4/9 of directors on BREIT’s Board of Directors are diverse.
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Blackstone is a founding signatory of the Institutional Limited Partners Association’s Diversity in Action initiative, which brings together
limited partners and general partners who share a commitment to advancing diversity, equity and inclusion in the private equity industry.
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43% of Blackstone’s 2023 global analyst class is female; 59% of Blackstone's 2023 U.S. analyst class is ethnically diverse.
■
Blackstone uses a hybrid in-person and virtual recruiting strategy to connect to more than 1,000 schools, including Historically Black
Colleges and Universities.
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To facilitate broad representation on the boards of its portfolio companies, Blackstone seeks to help its portfolio companies access a
wide pipeline of talent to identify individuals from a spectrum of backgrounds, skill-sets and experiences.
■
Blackstone’s Career Pathways program is designed to focus on two key areas: (1) recruiting top talent from historically untapped pools–
including, but not limited to, underrepresented racial groups, individuals without four-year college degrees, people with disabilities and
veterans; and (2) retaining and advancing talent through a culture of inclusivity, development and advancement opportunities. Through
Career Pathways, Blackstone aims to broaden the talent networks from which its portfolio companies recruit, develop and advance
talent..
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In 2021, Blackstone achieved its goal of 100,000 veterans, veteran spouses and caregivers hired across its portfolio. Having achieved its
goal, Blackstone continues to support its portfolio companies in veteran hiring efforts.
■
In September 2022, Blackstone announced a commitment to 2,000 refugee hires across its global portfolio companies and at its real
estate properties, including 1,500 refugees in the United States alone, by the end of 2025. As part of the announcement, Blackstone
joined Tent, a network of major companies committed to supporting refugees worldwide. Blackstone’s portfolio companies and real estate
properties have hired approximately 1,000 refugees from around the world, including Afghanistan, Ukraine, El Salvador and Guatemala.
Additionally, Blackstone has joined the Welcome.US CEO Council, an effort to accelerate and scale private sector support for refugees
from Afghanistan and Ukraine.
Employee Training and Development
■
Blackstone offers a wide range of learning and professional development opportunities, both formally and informally, to help employees
advance their careers and maximize the value they can add to the global firm. Employees are offered learning opportunities in a number
of areas, including leadership and management development and communication skills, among others. Blackstone offers a global
development curriculum on a quarterly basis. It provides employees with a broad library of trainings and resources that foster both
individual core skills and managerial capabilities. The process of developing Blackstone’s professionals’ talents and cultivating a culture
of inclusion begins the moment they join the firm. In 2022, Blackstone employees participated in a total of approximately 11,000 hours of
HR training and development programs.
■
Blackstone strengthened its new hire experience in 2022 by adding manager check-ins at the 30-day and 180-day marks. Blackstone
also added a new hire survey at the 60-day mark, in addition to the existing 90-day check-ins. These check-ins complement the mid-year
manager review and annual 360 feedback meeting that all employees receive. Blackstone is also introducing a variety of qualitative and
quantitative surveys to enable it to measure progress, drive accountability and maintain its culture.
Employee Engagement
■
Blackstone continually monitors culture and employee engagement through regular internal and external surveys.
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Blackstone is a top-ranked employer within its industry and the global business community, having earned awards and recognitions such as a
100% rating on the Human Rights Campaign’s Corporate Equality Index for the fourth year in a row in 2022, a certified “Great Place to Work”
in the U.S. in 2022 for six consecutive years, named a LinkedIn Top Company as part of an annual list of best workplaces to grow your career
in the U.S. in 2022, and included on the “UK’s 100 Best Large Companies to Work For” list with an additional honor of being named one of
“London’s 75 Best Large Companies to Work For” list in 2022.
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We define diverse to include individuals who are female and ethnically diverse. We define ethnically diverse to include Ethnic diversity in
the U.S., which is defined as Asian, American Indian, Alaska Native, Black or African American, Hispanic or Latino, Native Hawaiian or other
Pacific Islander, or individuals of
two or more races.
Employee Benefits
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Blackstone offers comprehensive and competitive benefits to its full-time employees, including primary and secondary caregiver leave,
adoption leave, phased back to work, fertility coverage, back-up childcare and more. Blackstone continually evaluates and enhances its
offerings to meet the needs of its employees. For example, Blackstone offers additional family planning benefits for U.S. employees such
as enhancing infertility benefits to include cryopreservation and primary caregiver leave up to 21 weeks.
■
Blackstone’s Equity Healthcare leverages the scale of Blackstone's portfolio to forge innovative partnerships that improve healthcare
quality and lower healthcare costs for U.S. portfolio companies.
Community
■
The Blackstone Charitable Foundation (“BXCF”) was established in 2007 and is committed to supporting Blackstone’s goal of fostering
economic opportunity and career mobility for historically underrepresented groups.
■
BX Connects is BXCF's global employee engagement program - a way for Blackstone employees to support their local communities
through volunteering and giving. Over 80% of Blackstone employees participated in annual firm-sponsored charitable activities in 2022.
■
Blackstone offers employee well-being programs, including a program that provides connections to immediate support, community
referrals, counseling and an engaging wellbeing platform with content, tools and a dynamic newsfeed to support employees and their
families in all areas of wellness. To further enhance support for employee health, Blackstone has partnered with various platforms
including platforms that provide on-demand emotional and mental health support, support families with comprehensive services for
pregnancy, child care, adult and elder care and bereavement and offer virtual, personalized support for mental, physical and emotional
health conditions and life changes.
■
BREIT has donated to the Navy SEAL Foundation for every stockholder that votes at its annual meetings for the last five years and will
do so again at the upcoming Annual Meeting.
Environmental
Sponsor Compliance with Environmental Regulations
■
Blackstone endeavors to be in full compliance with applicable environmental regulations in all locations where it has offices.
■
Blackstone Real Estate Debt Strategies’ loan origination business requires sponsors to remediate any material environmental concerns
prior to the origination of a loan and requires documentary provisions, such as representations and warranties, covenants, indemnities
and other provisions governing environmental matters to ensure ongoing sponsor compliance with applicable environmental laws.
Corporate Sustainability Practices
■
Blackstone’s expansion has created opportunities to enhance the sustainability of Blackstone’s operations by adopting technology
solutions for offices, selecting recyclable office products and partnering with energy-efficient travel providers. Select highlights from our
office sustainability program include the following:
—
100% of power purchased by Blackstone’s London office is from renewable energy suppliers. Blackstone’s new London office is
expected to be a fully electric building.
—
Blackstone seeks to renovate its spaces with efficient lighting and heating, ventilation and air conditioning (HVAC) systems.
Renovations to select floors in Blackstone’s New York offices included new energy-efficient, water-sourced HVAC heat pump systems
to reduce reliance on carbon-based fuels for heating.
■
Blackstone’s office pantries and meeting rooms feature recycling procedures and Blackstone’s office supplies include recycled products.
Blackstone’s “secure print” system seeks to reduce paper waste by requiring users to confirm printing jobs.
■
Climate Change:
—
In 2023, Blackstone published its inaugural report aligned with the TCFD (Task Force on Climate-Related Financial Disclosures),
including Blackstone’s Scope 1 and Scope 2 GHG emissions data as well as select Scope 3 GHG emissions data from Blackstone’s
business operations for 2019, 2020, 2021, and 2022.
—
Blackstone engages with climate-related organizations both at the firm level and through individual business units. Blackstone is a
signatory of PRI (Principles for Responsible Investment) as of July 2021 and a TCFD supporter as of October 2021. Select funds and
portfolio companies within Blackstone Infrastructure and Real Estate participate in GRESB (Global Real Estate Sustainability
Benchmark).
Governance
Board Composition and Effectiveness
■
BREIT seeks to ensure that our Board of Directors is composed of members whose experience, qualifications, attributes and skills, when
taken together, will allow our Board of Directors to satisfy its oversight responsibilities effectively. Our Board of Directors has two
members who have self-identified as women and two who have self-identified as racially or ethnically diverse.
■
Non-Independent Directors
|
12
|
Blackstone Real Estate Income Trust
|
—
Frank Cohen, our Chairperson and Chief Executive Officer and also a Senior Managing Director of Blackstone Real Estate, is a
valuable member of our Board of Directors because of his vast real estate experience, his history with Blackstone and his leadership
within Blackstone Real Estate’s Global Core+ business.
—
Robert Harper, our President and also a Senior Managing Director and the Head of Real Estate Asset Management Americas for
Blackstone Real Estate, is a valuable member of our Board of Directors because of his vast real estate experience, his history with
Blackstone and BREIT, and his leadership within Blackstone Real Estate’s business.
—
Wesley LePatner, our Chief Operating Officer and also a Senior Managing Director of Blackstone Real Estate and Global Head of
Blackstone Real Estate’s Global Core+ business, is a valuable member of our Board of Directors because of her extensive real
estate experience, her history with Blackstone and BREIT, and her leadership within Blackstone Real Estate’s Global Core+
business.
—
Brian Kim, our Head of Acquisitions and Capital Markets and also a Senior Managing Director of Blackstone Real Estate and Global
Chief Operating Officer of Blackstone Real Estate’s Global Core+ business, is a valuable member of our Board of Directors because
of his extensive real estate and investment experience, his history with Blackstone and his leadership within the Company.
■
Independent Directors
—
Raymond J. Beier, a former partner in the financial services practice at PricewaterhouseCoopers LLC, is a valuable member of our
Board of Directors because of his extensive experience with accounting and financial reporting matters, especially relating to
mergers, acquisitions and corporate finance transactions.
—
Susan Carras, a Senior Managing Director in the Washington, DC office of JLL Capital Markets, is a valuable member of our Board of
Directors because of her significant experience in the real estate industry.
—
Richard I. Gilchrist, a former Senior Advisor for acquisitions and investments at The Irvine Company, a privately-held real estate
investment company, is a valuable member of our Board of Directors and has a unique insight into our investment activities because
of his extensive experience in the real estate industry, including having served as an executive officer of several REITs, his
knowledge and experience in internal and external risk oversight, and his experience as a member of the board of directors of four
public REITs.
—
Field Griffith, the former Director of Real Estate Assets Investments for the Virginia Retirement System, is a valuable member of our
Board of Directors because of his extensive experience with real estate investments.
—
Edward Lewis, the Co-Founder and former Chairman and Chief Executive Officer of Essence Communications Partners, a
multimedia company targeting African-American women, and the Co-Founder of Latina magazine, is a valuable member of our Board
of Directors because of his extensive business experience as Founder and Chairman of Essence Communications, as well as the
skills he gained during his active board service to a number of diverse organizations.
■
Additionally, our Board of Directors is a majority independent board and each of its committees is comprised solely of independent
directors. Each of the members of our Board of Director’s committees is a highly sophisticated business veteran, bringing experience
from real estate, accounting and general business backgrounds to our Board of Director’s oversight function, which experience we
believe provides a majority of the members of our Board of Directors with business and risk management expertise.
—
Our Nominating and Corporate Governance Committee charter explicitly includes ESG oversight and our Audit Committee charter
explicitly includes risk assessment and risk management with respect to sustainability and climate change risks as they relate to
financial risk exposures.
Investment Thesis and Asset Management
■
Blackstone Real Estate has established core housing principles to provide a remarkable tenant experience.
■
Conduct rigorous due diligence on prospective BREIT investments.
■
Perform third-party reviews of portfolio companies managing BREIT properties to encourage strong governance.
■
Actively monitor BREIT investments for compliance with regulatory and firm requirements.
Independent Auditor
■
Deloitte & Touche LLP (“Deloitte”) has served as our independent auditor since 2016. Deloitte performs an annual audit of our financial
statements and we have received an unqualified opinion each year. In compliance with auditing standards set forth by the Public
Company Accounting Oversight Board in the U.S., Deloitte will rotate the audit partner responsible for signing our financial statements at
least every five years.
■
As part of the evaluation of our independent auditor, the Audit Committee periodically considers whether there should be a regular
rotation of the independent auditor. In addition, in conjunction with the mandated rotation of Deloitte’s lead audit partner, the Audit
Committee and the Audit Committee Chairperson are directly involved in the selection of Deloitte’s lead audit partner.
■
For information regarding the fees we paid to Deloitte in 2023 and 2022 and our approval procedures relating to Deloitte’s fees, see
“Proposal 2 – Ratification of Appointment of Independent Registered Public Accounting Firm.”
Financial Disclosures
■
We maintain “disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act,
that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is
|
2024 Proxy Statement
|
13
|
recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is
accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to
allow timely decisions regarding required disclosure.
Anti-Corruption and Related Due Diligence
■
Blackstone Real Estate Debt Strategies’ loan origination business completes an anti-corruption review prior to the origination of a loan,
typically including the commission of global OFAC and politically exposed person searches of all relevant individuals and entities, and
requires documentary provisions such as representations and warranties, covenants, indemnities and other provisions governing anti-
corruption, anti-money laundering and anti-terrorism compliance.
■
BREIT conducts risk-based due diligence on transaction counterparties as part of a robust “know your customer” governance process.
The diligence team typically obtains background and due diligence searches through reputable third-party search companies, the scope
of which includes OFAC, anti-money laundering compliance, litigation, bankruptcy, judgments, the Uniform Commercial Code and other
public registry filings.
Executive and Senior Officers
The following table sets forth the positions, ages as of April 1, 2024 and selected biographical information for our executive officers. Messrs.
Cohen’s, Harper’s and Kim’s and Ms. LePatner’s biographical information is provided in the section of this Proxy Statement entitled
“Proposal 1 – Election of Directors.”
|
Name
|
Age
|
Position
|
|
Frank Cohen
|
51
|
Chairperson of the Board and Chief Executive Officer
|
|
Robert Harper
|
45
|
President and Director
|
|
Wesley LePatner
|
42
|
Chief Operating Officer and Director
|
|
Brian Kim
|
44
|
Head of Acquisitions & Capital Markets and Director
|
|
Anthony F. Marone, Jr.
|
41
|
Chief Financial Officer and Treasurer
|
|
Leon Volchyok
|
40
|
Chief Legal Officer and Secretary
|
|
Paul Kolodziej
|
44
|
Deputy Chief Financial Officer
|
|
Zaneta Koplewicz
|
40
|
Head of Shareholder Relations
|
|
||
|
Anthony F. Marone, Jr.
Chief Financial Officer and Treasurer
|
||
|
■
Age: 41
|
||
|
Biographical Information
: Mr. Marone has been Chief Financial Officer and Treasurer of the Company since March 2021. He is a
Managing Director of Blackstone and the Head of Real Estate Finance Americas. Mr. Marone also serves as the Chief Financial Officer of
Blackstone Mortgage Trust (NYSE: BXMT). Prior to joining Blackstone in 2012, Mr. Marone was a Vice President and Controller at Capital
Trust, Inc., the predecessor business to BXMT. Previously, Mr. Marone worked in the Real Estate Assurance practice of
PricewaterhouseCoopers LLP.
Qualifications
: Mr. Marone received a BS and an MBA from Rutgers University and is a Certified Public Accountant and Chartered Global
Management Accountant.
|
||
|
14
|
Blackstone Real Estate Income Trust
|
|
||
|
Leon Volchyok
Chief Legal Officer and Secretary
|
||
|
■
Age: 40
|
||
|
Biographical Information
: Mr. Volchyok has been the Chief Legal Officer of the Company since September 2017 and he has been the
Secretary of the Company since June 2016. Mr. Volchyok is the General Counsel for Blackstone’s Private Wealth Solutions business. Mr.
Volchyok plays a key role in the structuring, launch and operations of the firm’s individual investor focused vehicles and serves as the
Chief Legal Officer for Blackstone Mortgage Trust (NYSE: BXMT) and Blackstone European Property Income Fund (BEPIF). Mr. Volchyok
is the prior Chairman of the Board for the Institute for Portfolio Alternatives and on the Executive Committee of NAREIT’s Public Non-
listed REIT Council.
Qualifications
: Mr. Volchyok received a BBA from Baruch College—Zicklin School of Business and a JD from Fordham Law School.
|
||
|
||
|
Paul Kolodziej
Deputy Chief Financial Officer
|
||
|
■
Age: 44
|
||
|
Biographical Information
: Mr. Kolodziej has been the Deputy Chief Financial Officer of the Company since December 2023 and was the
Company's Chief Accounting Officer from March 2019 to December 2023. He is also a Managing Director with Blackstone Real Estate
and previously served as Controller of the Company from June 2016 to March 2019. Mr. Kolodziej has also served as the Head of
Accounting for Blackstone Mortgage Trust Inc. (NYSE: BXMT) since February 2021. Prior to joining Blackstone in June 2016, Mr.
Kolodziej was a Senior Manager at PricewaterhouseCoopers LLP, where he provided assurance services to financial service clients
focused on REITs, private real estate funds and hedge funds. During his time at PricewaterhouseCoopers LLP, Mr. Kolodziej also
completed a two year rotation in PricewaterhouseCoopers LLP’s SEC Services Group within their National Office, focusing on client
consultations over a wide range of matters related to security registrations and on-going SEC filing requirements.
Qualifications
: Mr. Kolodziej received a BS in Accountancy from DePaul University and is a Certified Public Accountant.
|
||
|
||
|
Zaneta Koplewicz
Head of Shareholder Relations
|
||
|
■
Age: 40
|
||
|
Biographical Information
: Ms. Koplewicz has been the Head of Shareholder Relations of the Company since December 2023. She is a
Managing Director with Blackstone Real Estate. Since joining Blackstone in 2021, Ms. Koplewicz’s primary responsibility has been
managing the Company’s interface with clients and other key stakeholders. Before joining Blackstone, Ms. Koplewicz spent 14 years at
BlackRock where she was most recently a Managing Director responsible for developing and growing relationships with large, strategic
clients in North America. Prior to that, she held several roles within BlackRock Alternative Investors including Global Head of Product
Strategy for the Event Driven business, where she led client engagement and business strategy for the platform across institutional and
private wealth clients. Ms. Koplewicz was also instrumental in BlackRock’s sustainability efforts, leading a global working group which
served as a key catalyst for the establishment of BlackRock Sustainable and Transition Solutions.
Qualifications
: Ms. Koplewicz received a BA in Politics with a certificate in African American Studies from Princeton University.
|
||
|
2024 Proxy Statement
|
15
|
Compensation of Directors and Executive Officers
Executive Officer Compensation
We are externally managed and currently have no employees other than the employees that are employed by certain of our portfolio
entities, and none of whom are executive officers of the Company or are involved in the management of the Company. Our executive
officers serve as officers of the Adviser and are employees of the Adviser or one or more of its affiliates. Our Advisory Agreement provides
that the Adviser is responsible for managing our investment activities. Our executive officers do not receive any compensation from us or
any of our subsidiaries for serving as our executive officers but, instead, receive compensation from Blackstone. In addition, we do not
reimburse the Adviser for compensation it pays to our executive officers. The Advisory Agreement does not require our executive officers to
dedicate a specific amount of time to fulfilling the Adviser’s obligations to us under the Advisory Agreement. Accordingly, the Adviser has
informed us that it cannot identify the portion of the compensation it awards to our executive officers that relates solely to such executives’
services to us, as the Adviser does not compensate its employees specifically for such services. Furthermore, we do not have employment
agreements with our executive officers, we do not provide pension or retirement benefits, perquisites or other personal benefits to our
executive officers, our executive officers have not received any nonqualified deferred compensation and we do not have arrangements to
make payments to our executive officers upon their termination or in the event of a change in control of us.
Although we do not pay our executive officers any compensation, we pay the Adviser the fees described under the heading “Transactions
with Related Persons and Certain Control Persons — Our Relationship with Our Adviser and Blackstone — Advisory Agreement.”
Non-Employee Director Stock Ownership Policy
The Board of Directors has adopted a stock ownership policy for our non-employee directors in order to better align our non-employee
directors’ financial interests with those of our stockholders by requiring such directors to own a minimum level of our stock. Each of our non-
employee directors (other than a non-employee director who is employed by one of our stockholders (or any affiliate thereof) that meets the
ownership requirements for a non-employee director) is required to own shares in an amount equal to five times his or her annual cash
retainer within five years of becoming subject to the policy. All of our non-employee directors are in compliance with the stock ownership
policy.
Non-Employee Director Compensation
Our non-employee directors receive an annual retainer of $225,000, consisting of $80,000 cash and a $145,000 grant of restricted stock.
Additionally, the Audit Committee Chairperson receives an additional retainer of $15,000 and each Chairperson of our other committees
receives an additional retainer of $10,000. The annual grant of restricted stock is based on the then-current per share transaction price of
our Class I shares (“Class I”) at the time of grant and generally vests one year from the date of grant.
We do not pay our directors additional fees for attending board or committee meetings. All directors are reimbursed for reasonable out-of-
pocket expenses incurred in attending board and committee meetings (including, but not limited to, airfare, hotel and food). Our directors
who are affiliated with the Adviser or Blackstone do not receive additional compensation for serving on the Board of Directors or committees
thereof.
The following table sets forth the compensation earned by or paid to our directors for the fiscal year ended December 31, 2023:
|
Name
|
Fees Earned or
Paid in Cash ($)
|
Stock Awards ($)
(1)
|
Total ($)
|
|
Frank Cohen
|
—
|
—
|
—
|
|
A.J. Agarwal
(2)
|
—
|
—
|
—
|
|
Robert Harper
|
—
|
—
|
—
|
|
Wesley LePatner
|
—
|
—
|
—
|
|
Brian Kim
|
—
|
—
|
—
|
|
Raymond J. Beier
|
$95,000
|
$145,000
|
$240,000
|
|
Richard I. Gilchrist
|
$90,000
|
$145,000
|
$235,000
|
|
Field Griffith
|
$90,000
|
$145,000
|
$235,000
|
|
Edward Lewis
|
$90,000
|
$145,000
|
$235,000
|
|
Susan Carras
|
$80,000
|
$145,000
|
$225,000
|
(1)
Represents the aggregate grant date fair value of awards of restricted shares of Class I common stock calculated under the Financial
Accounting Standard Board’s Accounting Codification Topic 718 without taking into account estimated forfeitures. The number of
shares awarded to each of our independent directors was 9,788.963, which was determined by dividing $145,000 by the then-current
NAV of our Class I shares at the time of grant in August 2023. Such shares vest in August 2024.
(2)
Mr. Agarwal stepped down from his role as a member of our Board of Directors effective August 14, 2023.
|
16
|
Blackstone Real Estate Income Trust
|
Equity Compensation Plan Information
As of December 31, 2023, we did not have an equity compensation plan or individual compensation arrangements under which equity
securities of the registrant are authorized for issuance to our executive officers or directors. We award restricted stock to our directors as
described above in “Compensation of Directors and Executive Officers—Non-Employee Director Compensation” and we issued incentive
compensation awards to certain employees of portfolio company service providers and certain employees of Home Partners of America,
and April Housing, all of which are indirect, wholly owned subsidiaries of BREIT, that entitles them to receive an allocation of the Company’s
total return over a certain hurdle amount, as determined by the Company as described in “Transactions with Related Persons and Certain
Control Persons—Affiliate Service Agreements—Blackstone Affiliate—Portfolio Entities—Securities Authorized for Issuance Under Equity
Compensation Plans.”
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of April 4, 2024, information regarding the number and percentage of shares of our common stock owned
by each director, our named executive officers, all directors and executive officers as a group, and any person known to us to be the
beneficial owner of more than 5% of outstanding shares of our common stock. As of April 4, 2024, there were a total of 3,971,024,254
shares of our common stock issued and outstanding. Beneficial ownership is determined in accordance with the rules of the SEC and
includes securities that a person has the right to acquire within 60 days. The address for our directors and officers is in care of our principal
executive offices at 345 Park Avenue, New York, NY 10154.
|
Name of Beneficial Owner
|
Number of Shares
Beneficially Owned
|
|
Percent of Shares
Beneficially Owned
|
|
Directors and Named Executive Officers:
|
|||
|
Frank Cohen
|
1,380,738
|
|
*
|
|
Robert Harper
|
514,952
|
|
*
|
|
Wesley LePatner
|
207,964
|
|
*
|
|
Brian Kim
|
395,602
|
|
*
|
|
Anthony F. Marone, Jr.
|
10,830
|
|
*
|
|
Raymond J. Beier
|
73,518
|
|
*
|
|
Susan Carras
|
53,285
|
|
*
|
|
Richard I. Gilchrist
|
86,111
|
|
*
|
|
Field Griffith
|
73,518
|
|
*
|
|
Edward Lewis
|
73,518
|
|
*
|
|
All current executive officers and directors as a group (13
persons)
|
2,870,037
|
|
*
|
|
5% Stockholders
|
|||
|
The Regents of the University of California
(1)
|
302,775,462
|
8
%
|
All shares listed in the table above are Class I shares.
*
Represents less than 1%
(1) The business address for The Regents of the University of California is 1111 Franklin Street, Oakland, CA 94607.
As of April 4, 2024, Blackstone owned an aggregate $2.6 billion of shares of our common stock and Operating Partnership units. In addition,
Blackstone employees, including our executive officers, owned an aggregate $1.4 billion of shares of our common stock and Operating
Partnership units.
|
2024 Proxy Statement
|
17
|
Transactions with Related Persons and Certain
Control Persons
The following describes all transactions during the fiscal year ended December 31, 2023 and currently proposed transactions involving us,
our directors, our Adviser, Blackstone and any affiliate thereof.
Our Relationship with Our Adviser and Blackstone
We are externally managed by our Adviser, BX REIT Advisors L.L.C., a Delaware limited liability company, which is responsible for sourcing,
evaluating and monitoring our investment opportunities and making decisions related to the acquisition, management, financing and
disposition of our assets, in accordance with our investment objectives, guidelines, policies and limitations, subject to oversight by our
Board of Directors. The Adviser is part of Blackstone Real Estate, which serves as our sponsor. All of our officers and directors, other than
the independent directors, are employees of Blackstone. We have and will continue to have certain relationships with the Adviser and its
affiliates.
Advisory Agreement
We are managed and advised by the Adviser pursuant to the Advisory Agreement that first became effective August 31, 2016; however, we
did not commence active operations until January 1, 2017, when we had satisfied the minimum offering requirement in our initial public
offering and our Board of Directors had authorized the release of proceeds from escrow to us.
Pursuant to the Advisory Agreement and subject to the supervision of our Board of Directors, the Adviser is responsible for, among other
things:
■
serving as an advisor to us and the Operating Partnership with respect to the establishment and periodic review of our investment
guidelines and our and the Operating Partnership’s investments, financing activities and operations;
■
sourcing, evaluating and monitoring our and the Operating Partnership’s investment opportunities and executing the acquisition,
management, financing and disposition of our and the Operating Partnership’s assets, in accordance with our investment guidelines,
policies and objectives and limitations, subject to oversight by our Board of Directors;
■
with respect to prospective acquisitions, purchases, sales, exchanges or other dispositions of investments, conducting negotiations on
our and the Operating Partnership’s behalf with sellers, purchasers, and other counterparties and, if applicable, their respective agents,
advisors and representatives, and determining the structure and terms of such transactions;
■
providing us with portfolio management and other related services;
■
serving as our advisor with respect to decisions regarding any of our financings, hedging activities or borrowings; and
■
engaging and supervising, on our and the Operating Partnership’s behalf and at our and the Operating Partnership’s expense, various
service providers.
The above summary is provided to illustrate the material functions that the Adviser performs for us and it is not intended to include all of the
services that may be provided to us by the Adviser or third parties.
Management Fee
As compensation for its services provided pursuant to the Advisory Agreement, we pay the Adviser a management fee equal to 1.25% of our
monthly net asset value as determined pursuant to our valuation policies (“NAV”) for the Class T shares, Class S shares, Class D shares,
Class I shares and Class C shares per annum, payable monthly. Additionally, to the extent that our Operating Partnership issues Operating
Partnership units to parties other than us, our Operating Partnership will pay the Adviser a management fee equal to 1.25% of the NAV of
the Operating Partnership attributable to such Class T, Class S, Class D, Class I, Class C and Class B Operating Partnership units not held
by us per annum payable monthly. We do not pay the Adviser a management fee with respect to the Class F shares or Class F units. In
calculating our management fee, we use our NAV before giving effect to accruals for the management fee, the performance participation
allocation described below, stockholder servicing fees or distributions payable on our shares. The management fee may be paid, at the
Adviser’s election, in cash, certain classes of our common shares and/or Operating Partnership units, or any combination thereof.
During the year ended December 31, 2023, we incurred annual management fees equal to 1.25% of NAV for the Class T shares, Class S
shares, Class D shares, Class I shares and Class C shares, totaling $839.2 million. During the year ended December 31, 2023, we issued
24.8 million Class I shares and 28.0 million Operating Partnership units to the Adviser as payment for management fees. We also had a
payable of $63.5 million related to the management fees as of December 31, 2023. During January 2024, the Adviser was issued 4.5 million
Operating Partnership units as payment for the management fees accrued as of December 31, 2023. The shares of our common stock and
Operating Partnership units issued to the Adviser for payment of the management fee were issued at the applicable NAV per share/unit at
the end of each month for which the fee was earned. The Adviser did not submit any repurchase requests for shares previously issued as
payment for management fees during the year ended December 31, 2023.
Performance Participation
So long as the Advisory Agreement has not been terminated (including by means of non-renewal), BREIT Special Limited Partner L.P. (the
“Special Limited Partner”), a wholly owned subsidiary of Blackstone, will hold a performance participation interest in the Operating
|
18
|
Blackstone Real Estate Income Trust
|
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, with a Catch-Up (each term as defined below). Such allocation will be measured on a calendar year
basis, made quarterly and accrued monthly. The performance participation interest is not paid on the Class F units.
Promptly following the end of each calendar quarter that is not also the end of a calendar year, the Special Limited Partner will be entitled to
a performance participation allocation as described above, calculated in respect of the portion of the year to date, less any performance
participation allocation received with respect to prior quarters in that year (the “Quarterly Allocation”). The performance participation
allocation that the Special Limited Partner is entitled to receive at the end of each calendar year will be reduced by the cumulative amount
of Quarterly Allocations that year.
Specifically, the Special Limited Partner will be allocated a performance participation in an amount equal to:
■
First, if the Total Return for the applicable period exceeds the sum of (i) the Hurdle Amount for that period and (ii) the Loss Carryforward
Amount (any such excess, “Excess Profits”), 100% of such Excess Profits until the total amount allocated to the Special Limited Partner
equals 12.5% of the sum of (x) the Hurdle Amount for that period and (y) any amount allocated to the Special Limited Partner pursuant to
this clause (this is commonly referred to as a “Catch-Up”); and
■
Second, to the extent there are remaining Excess Profits, 12.5% of such remaining Excess Profits.
“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 Class T units, Class S units, Class D units, Class C units, Class I units and
Class B units (collectively, the "Performance Participation Units") of the Operating Partnership outstanding at the end of such period since
the beginning of the then-current calendar year plus
(ii) the change in aggregate NAV of such Performance Participation Units since the beginning of the year, before giving effect to (x) changes
resulting solely from the proceeds of issuances of Performance Participation 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 Performance
Participation Units issued during the then-current calendar year but (ii) exclude the proceeds from the initial issuance of such Performance
Participation 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 Performance Participation Units outstanding at the beginning of the then-current calendar year and all Performance Participation
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 Performance Participation Units and all issuances of Performance Participation Units over the period
and calculated in accordance with recognized industry practices. The ending NAV of the Performance Participation Units used in calculating
the internal rate of return will be calculated before giving effect to any allocation/accrual to the performance participation interest and
applicable stockholder servicing fee expenses, provided that the calculation of the Hurdle Amount for any period will exclude any
Performance Participation Units repurchased during such period, which units will be subject to the performance participation allocation upon
repurchase as described below.
Except as described in Loss Carryforward below, any amount by which Total Return falls below the Hurdle Amount will not be carried
forward to subsequent periods.
“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
and provided further that the calculation of the Loss Carryforward Amount will exclude the Total Return related to any Performance
Participation Units repurchased during such year, which units will be subject to the performance participation allocation upon repurchase as
described below. 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.”
The Special Limited Partner will also be allocated a performance participation with respect to all Performance Participation Units that are
repurchased at the end of any month (in connection with repurchases of our shares in our share repurchase plan) in an amount calculated
as described above with the relevant period being the portion of the year for which such unit was outstanding, and proceeds for any such
unit repurchase will be reduced by the amount of any such performance participation.
If a Quarterly Allocation is made and at the end of a subsequent calendar quarter in the same calendar year the Special Limited Partner is
entitled to less than the previously received Quarterly Allocation(s) (a “Quarterly Shortfall”), then subsequent distributions of any Quarterly
Allocations or year-end Performance Allocations in that calendar year will be reduced by an amount equal to such Quarterly Shortfall, until
such time as no Quarterly Shortfall remains. If all or any portion of a Quarterly Shortfall remains at the end of a calendar year following the
application described in the previous sentence, distributions of any Quarterly Allocations and year-end Performance Allocations in the
subsequent four calendar years will be reduced by (i) the remaining Quarterly Shortfall plus (ii) an annual rate of 5% on the remaining
Quarterly Shortfall measured from the first day of the calendar year following the year in which the Quarterly Shortfall arose and
compounded quarterly (collectively, the “Quarterly Shortfall Obligation”) until such time as no Quarterly Shortfall Obligation remains;
provided, that the Special Limited Partner (or its affiliate) may make a full or partial cash payment to reduce the Quarterly Shortfall
Obligation at any time; provided, further, that if any Quarterly Shortfall Obligation remains following such subsequent four calendar years,
then the Special Limited Partner (or its affiliate) will promptly pay the Operating Partnership the remaining Quarterly Shortfall Obligation in
cash.
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Distributions on the performance participation interest may be payable in cash, Class I units, Class C units, Class B units or Class F units
(collectively, "SLP Performance Units") at the election of the Special Limited Partner. If the Special Limited Partner elects to receive such
distributions in SLP Performance Units, the Special Limited Partner may request the Operating Partnership to repurchase such Operating
Partnership units (including any units received in exchange for any SLP Performance Units) from the Special Limited Partner at a later date.
Any such repurchase requests will not be subject to the Early Repurchase Deduction but will be subject to similar repurchase limits that
exist under our share repurchase plan. The Operating Partnership will repurchase any such Operating Partnership units for the
corresponding class of shares of our common stock or cash (at the Special Limited Partner’s election) unless our Board of Directors
determines that any such repurchase for cash would be prohibited by applicable law or the Operating Partnership’s partnership agreement,
in which case such Operating Partnership units will be repurchased for the corresponding class of shares of our common stock with an
equivalent aggregate NAV. The Operating Partnership will repurchase any such Class B units from the Special Limited Partner subject to
similar repurchase limits under the Company’s share repurchase plan.
During the year ended December 31, 2023, we did not recognize any performance participation allocation expense in our Consolidated
Statements of Operations due to a negative total return of $355.7 million, which will be treated as a loss carry forward until such amount is
recouped. During the year ended December 31, 2022, we recognized $742.7 million of performance participation allocation expense in our
Consolidated Statements of Operations. For the year ended December 31, 2022, the full year performance participation allocation was less
than the previously distributed Quarterly Allocations resulting in a Quarterly Shortfall amount of $74.9 million. Such Quarterly Shortfall
amount is recorded as a receivable from the Special Limited Partner and included as a component of Other Assets on our Consolidated
Balance Sheets. Beginning January 1, 2023, interest on the Quarterly Shortfall began accruing at a 5% annual rate, compounded quarterly.
During the year ended December 31, 2023, we accrued interest income of $3.8 million related to such Quarterly Shortfall amount.
Expense Reimbursements
Under the Advisory Agreement, and subject to the limitations described below under the heading “Reimbursement by the Adviser,” our
Adviser is entitled to reimbursement of all costs and expenses incurred by it or its affiliates on our behalf, provided that the Adviser is
responsible for the expenses related to any and all personnel of the Adviser who provide investment advisory services to us pursuant to the
Advisory Agreement (including, without limitation, each of our executive officers and any directors who are also directors, officers or
employees of the Adviser or any of its affiliates), including, without limitation, salaries, bonus and other wages, payroll taxes and the cost of
employee benefit plans of such personnel, and costs of insurance with respect to such personnel. In addition to the organization and
offering costs described below, and without limiting the generality of the foregoing, costs eligible for reimbursement include out-of-pocket
costs and expenses the Adviser incurs in connection with the services it provides to us related to (1) the actual amount paid to third parties
for goods and services, including fees paid to administrators, consultants, attorneys, technology providers and other service providers, and
brokerage fees paid in connection with the purchase and sale of investments and securities or charitable donations, such as in connection
with our annual stockholder meetings, (2) expenses of managing and operating our properties, whether payable to an affiliate or a non-
affiliated person, and (3) out-of-pocket expenses in connection with the selection and acquisition of properties and real estate debt, whether
or not such investments are acquired. Such out-of-pocket costs and expenses also will include expenses relating to compliance-related
matters and regulatory filings relating to our activities (including, without limitation, expenses relating to requests for information,
examinations and inquiries or any regulatory proceedings against us, the Adviser, the Dealer Manager (as defined below) and any of their
respective affiliates, expenses relating to requests for information and inquiries from press or other news sources, expenses relating to the
preparation and filing of Form PF, Form ADV, reports to be filed with the CFTC, reports, disclosures, and/or other regulatory filings of the
Adviser and its affiliates relating to our activities (including our pro rata share of the costs of the Adviser and its affiliates of regulatory
expenses that relate to us and Other Blackstone Accounts (as defined herein)).
The Adviser may retain, for and on our behalf, and at our sole cost and expense, such service providers as it deems necessary or advisable
in connection with the management and operations of our company, which may include affiliates of the Adviser, provided that any such
services may only be provided by affiliates to the extent such services are approved by a majority of our Board of Directors (including a
majority of the independent directors) not otherwise interested in such transactions as being fair and reasonable to us.
As of December 31, 2023 , the Adviser had paid $2.6 million of expenses on our behalf for general corporate expenses provided by
unaffiliated third parties. Such expenses are reimbursed by us to the Advisor in the ordinary course. Additionally, as of December 31, 2023,
we had a receivable of $4.2 million from certain portfolio companies owned by Blackstone-advised investment vehicles related to incentive
compensation awards.
Organization and Offering Costs
We reimburse our Adviser for any organization and offering expenses associated with our public and private offerings, including our public
offering and offerings by feeder vehicles (which are primarily created to hold our shares and in turn offer interests in such feeder vehicles to
non-U.S. persons), that the Adviser incurs on our behalf (including organizational, legal, accounting, printing, mailing, subscription processing
and filing fees and expenses, expenses incurred in connection with the provision of administrative or similar services by intermediary
platforms or participating broker-dealers for their clients and reasonable bona fide due diligence expenses of participating broker-dealers
supported by detailed and itemized invoices, costs in connection with preparing sales materials, design and website expenses, fees and
expenses of our transfer agent, formation, distribution, administrative, regulatory or similar expenses related to the management and
operation of feeder vehicles or related entities and expense reimbursements for actual costs incurred by employees of Blackstone Securities
Partners L.P., an affiliate of our Adviser (the “Dealer Manager”), in the performance of wholesaling activities, but excluding upfront selling
commissions, dealer manager fees and the stockholder servicing fee) as and when incurred. The Adviser currently pays wholesaling
compensation expenses and certain related expenses of persons associated with the Dealer Manager without reimbursement from us. After
the termination of a primary offering and again after termination of an offering under our distribution reinvestment plan, the Adviser has
agreed to reimburse us to the extent that the organization and offering expenses that we incur exceed 15% of our gross proceeds from the
applicable offering.
During the fiscal year ended December 31, 2023, there were no new organization costs incurred on our behalf.
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Term and Termination Rights under the Advisory Agreement
Our Advisory Agreement was most recently renewed on March 7, 2024 and has a one-year term expiring March 31, 2025, subject to further
renewals by our Board of Directors for an unlimited number of successive one-year periods. Our independent directors will evaluate
performance of the Adviser before renewing the Advisory Agreement. The Advisory Agreement may be terminated (1) immediately by us (i)
for “cause,” (ii) upon the bankruptcy of the Adviser or (iii) upon a material breach of the Advisory Agreement by the Adviser, (2) upon 60
days’ written notice by us without cause or penalty upon the vote of a majority of our independent directors or (3) upon 60 days’ written
notice by the Adviser. “Cause” is defined in the Advisory Agreement to mean fraud, criminal conduct, willful misconduct or willful or negligent
breach of fiduciary duty by the Adviser under the Advisory Agreement.
In the event the Advisory Agreement is terminated, the Adviser will be entitled to receive its prorated management fee through the date of
termination. In addition, upon the termination or expiration of the Advisory Agreement, the Adviser will cooperate with us and take all
reasonable steps requested to assist our Board of Directors in making an orderly transition of the advisory function.
Reimbursement by the Adviser
The Adviser will reimburse us for any expenses that cause our “total operating expenses” in any four consecutive fiscal quarters to exceed
the greater of:
(1) 2% of our “average invested assets” or (2) 25% of our “net income”.
Notwithstanding the foregoing, to the extent that our total operating expenses exceed these limits and the independent directors determine
that the excess expenses were justified based on unusual and nonrecurring factors that they deem sufficient, the Adviser would not be
required to reimburse us. Within 60 days after the end of any fiscal quarter for which our total operating expenses for the four consecutive
fiscal quarters then ended exceed these limits and our independent directors approve such excess amount, we will send our stockholders a
written disclosure of such fact, or will include such information in our next quarterly report on Form 10-Q or in a current report on Form 8-K
filed with the SEC, together with an explanation of the factors our independent directors considered in arriving at the conclusion that such
excess expenses were justified. In addition, our independent directors will review at least annually the total fees and expense
reimbursements for operating expenses paid to the Adviser and the Special Limited Partner to determine if they are reasonable in light of
our performance, our net assets and our net income and the fees and expenses of other comparable unaffiliated REITs. Each such
determination will be recorded in the minutes of a meeting of the independent directors.
For purposes of these limits, (1) “total operating expenses” are all costs and expenses paid or incurred by us, as determined under
generally accepted accounting principles, including the management fee and the performance participation, but excluding: (i) the expenses
of raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and
other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, registration and
listing of our capital stock, (ii) property-level expenses incurred at each property, (iii) interest payments, (iv) taxes, (v) non-cash
expenditures such as depreciation, amortization and bad debt reserves, (vi) incentive fees paid in compliance with our charter, (vii)
acquisition fees and acquisition expenses related to the selection and acquisition of assets, whether or not a property is actually acquired,
(viii) real estate commissions on the sale of property and (ix) other fees and expenses connected with the acquisition, disposition and
ownership of real estate interests, mortgage loans or other property (including the costs of foreclosure, insurance premiums, legal services,
maintenance, repair and improvement of property); (2) “average invested assets” means, for any period, the average of the aggregate book
value of our assets, invested, directly or indirectly, in equity interests in and loans secured by real estate, including all properties, mortgages
and real estate-related securities and consolidated and unconsolidated joint ventures or other partnerships, before deducting depreciation,
amortization, impairments, bad debt reserves or other non-cash reserves, computed by taking the average of such values at the end of
each month during such period; and (3) “net income” means, for any period, total revenues applicable to such period, less the total
expenses applicable to such period other than additions to, or allowances for, non-cash charges such as depreciation, amortization,
impairments and reserves for bad debt or other similar non-cash reserves. For the fiscal year ended December 31, 2023, our total operating
expenses were 0.7% and 51.4% of each of our average invested assets and our net income, respectively.
Independent Directors’ Review of Compensation
Our independent directors evaluate at least annually whether the compensation that we contract to pay to the Adviser is reasonable in
relation to the nature and quality of services performed and that such compensation is within the limits prescribed by our charter. Our
independent directors supervise the performance of the Adviser and the compensation we pay to it to determine that the provisions of the
Advisory Agreement are being carried out. This evaluation is based on the factors set forth below, as well as any other factors deemed
relevant by the independent directors:
■
the amount of fees paid to the Adviser in relation to the size, composition and performance of our investments;
■
the success of the Adviser in generating investments that meet our investment objectives;
■
rates charged to other externally advised REITs and other similar investment entities by advisors performing similar services;
■
additional revenues realized by the Adviser and its affiliates through their advisory relationship with us (including the performance
participation allocation paid to the Special Limited Partner);
■
the quality and extent of the services and advice furnished by the Adviser;
■
the performance of the assets, including income, conservation or appreciation of capital, frequency of problem investments and
competence in dealing with distress situations; and
■
the quality of our portfolio in relationship to the investments generated by the Adviser for its own account.
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In addition to the management fee, performance participation and expense reimbursements, we have agreed to indemnify and hold
harmless the Adviser and its affiliates performing services for us from specific claims and liabilities arising out of the performance of their
obligations under the Advisory Agreement, subject to certain limitations.
Dealer Manager Agreement
We entered into a Dealer Manager Agreement with the Dealer Manager pursuant to which the Dealer Manager agreed to, among other
things, manage our relationships with third-party broker-dealers engaged by the Dealer Manager to participate in the distribution of shares
of our common stock, which we refer to as “participating broker-dealers,” and financial advisors. The Dealer Manager also coordinates our
marketing and distribution efforts with participating broker-dealers and their registered representatives with respect to communications
related to the terms of our public offering, our investment strategies, material aspects of our operations and subscription procedures. We
will not pay referral or similar fees to any accountants, attorneys or other persons in connection with the distribution of our shares. The
Dealer Manager is a registered broker-dealer affiliated with the Adviser.
Upfront Selling Commissions and Dealer Manager Fees
The Dealer Manager is entitled to receive upfront selling commissions of up to 3.0%, and upfront dealer manager fees of 0.5%, of the
transaction price of each Class T Share (“Class T”) sold in our primary offering; however such amounts may vary at certain participating
broker-dealers, provided that the sum will not exceed 3.5% of the transaction price. The Dealer Manager is entitled to receive upfront selling
commissions of up to 3.5% of the transaction price of each Class S Share (“Class S”) sold in the primary offering. The Dealer Manager may
be entitled to receive upfront selling commissions of up to 1.5% of the transaction price of each Class D Share (“Class D”) sold in the
primary offering. No upfront selling commissions or dealer manager fees are paid with respect to purchases of Class I shares or shares of
any class sold pursuant to our distribution reinvestment plan.
During the year ended December 31, 2023, we paid $6.5 million in upfront selling commissions and upfront dealer manager fees to the
Dealer Manager. The Dealer Manager has entered into agreements with participating broker-dealers distributing our shares in our primary
offering, and all of the upfront selling commissions and dealer manager fees were reallowed (paid) to, such participating broker-dealers. For
the fiscal year ended December 31, 2023, the costs of raising capital in our primary offering and our distribution reinvestment plan, which
represent all upfront selling commissions, upfront dealer manager fees, stockholder servicing fees and organization and offering costs
accrued by us during the year ended December 31, 2023, represented 3.5% of the capital raised.
Stockholder Servicing Fees
Subject to FINRA limitations on underwriting compensation and certain other limitations described below, we pay the Dealer Manager
selling commissions over time as stockholder servicing fees (i) with respect to our outstanding Class T shares equal to 0.85% per annum of
the aggregate NAV of our outstanding Class T shares, consisting of a representative stockholder servicing fee of 0.65% per annum, and a
dealer stockholder servicing fee of 0.20% per annum, of the aggregate NAV of our outstanding Class T shares, however, with respect to
Class T shares sold through certain participating broker-dealers, the representative stockholder servicing fee and the dealer stockholder
servicing fee may be other amounts, provided that the sum of such fees will always equal 0.85% per annum of the NAV of such shares, (ii)
with respect to our outstanding Class S shares equal to 0.85% per annum of the aggregate NAV of our outstanding Class S shares and (iii)
with respect to our outstanding Class D shares equal to 0.25% per annum of the aggregate NAV of our outstanding Class D shares. We do
not pay a stockholder servicing fee with respect to our outstanding Class I shares, Class C shares or Class F shares.
The stockholder servicing fees are paid monthly in arrears. The Dealer Manager reallows (pays) all or a portion of the stockholder servicing
fees to participating broker-dealers and servicing broker-dealers for ongoing stockholder services performed by such broker-dealers, and
will waive stockholder servicing fees to the extent a broker-dealer is not eligible to receive it for failure to provide such services. Because
the stockholder servicing fees with respect to Class T shares, Class S shares and Class D shares are calculated based on the aggregate
NAV for all of the outstanding shares of each such class, it reduces the NAV with respect to all shares of each such class, including shares
issued under our distribution reinvestment plan.
We will cease paying the stockholder servicing fee with respect to any Class T share, Class S share or Class D share held in a
stockholder’s account at the end of the month in which the Dealer Manager in conjunction with the transfer agent determines that total
upfront selling commissions, dealer manager fees and stockholder servicing fees paid with respect to the shares held by such stockholder
within such account would exceed, in the aggregate, 8.75% (or, in the case of Class T shares sold through certain participating broker-
dealers, a lower limit as set forth in the applicable agreement between the Dealer Manager and a participating broker-dealer at the time
such Class T shares were issued) of the gross proceeds from the sale of such shares (including the gross proceeds of any shares issued
under our distribution reinvestment plan with respect thereto). At the end of such month, each such Class T share, Class S share or Class D
share will convert into a number of Class I shares (including any fractional shares) with an equivalent aggregate NAV as such share.
In addition, we will cease paying the stockholder servicing fee on the Class T shares, Class S shares and Class D shares on the earlier to
occur of the following: (i) a listing of Class I shares, (ii) our merger or consolidation with or into another entity, or the sale or other
disposition of all or substantially all of our assets or (iii) the date following the completion of the primary portion of the registered offering in
which such shares were sold on which, in the aggregate, underwriting compensation from all sources in connection with such offering,
including upfront selling commissions, the stockholder servicing fee and other underwriting compensation, is equal to 10% of the gross
proceeds from such primary offering.
During the fiscal year ended December 31, 2023, we paid $207.4 million in stockholder servicing fees to the Dealer Manager. As described
above, the Dealer Manager reallowed (paid) all or a portion of the stockholder servicing fees to participating broker-dealers and servicing
broker-dealers for ongoing stockholder services performed by such broker-dealers.
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Affiliate Service Agreements
We retain certain of the Adviser’s affiliates, from time to time, for services relating to our investments or our operations, which may include
accounting and audit services (including valuation support services), account management services, corporate secretarial services, data
management services, directorship services, information technology services, finance/budget services, human resources, judicial
processes, legal services, operational services, risk management services, tax services, treasury services, loan management services,
construction management services, property management services, leasing services, property, title and/or other types of insurance and
related services, transaction support services, transaction consulting services and other similar operational matters. We have adopted a
long-term incentive plan which we use to attract and retain qualified employees of certain of our portfolio entities and other affiliated service
providers. Our Operating Partnership or its subsidiary may also issue equity incentive compensation to certain employees of such affiliates
for services provided. Any compensation paid to the Adviser’s affiliates for any such services will not reduce the management fee or
performance participation allocation. Any such arrangements will be at or below market rates.
Blackstone-Affiliated Portfolio Entities
Portfolio entities of investment funds, REITs, vehicles, accounts, products and/or other similar arrangements sponsored, advised, and/or
managed by Blackstone or its affiliates, whether currently in existence or subsequently established (in each case, including any related
successor funds, alternative vehicles, supplemental capital vehicles, surge funds, over-flow funds, co-investment vehicles and other entities
formed in connection with Blackstone or its affiliates side-by-side or additional general partner investments with respect thereto) (“Other
Blackstone Accounts”) are and will be counterparties or participants in agreements, transactions and other arrangements with us for the
provision of goods and services, purchase and sale of assets and other matters. In addition, certain of our portfolio entities may be
counterparties or participants in agreements, transactions and other arrangements with Other Blackstone Accounts for the provision of
goods and services, purchase and sale of assets and other matters. These agreements, transactions and other arrangements will involve
payment of fees and other amounts, none of which will result in any offset to the management fees we pay to the Adviser notwithstanding
that some of the services provided by such portfolio entity are similar in nature to the services provided by the Adviser. Generally, we may
engage Blackstone-affiliated portfolio entities or allow our portfolio entities to be engaged by Blackstone-affiliated entities only if a majority
of our Board of Directors, and a majority of the Affiliate Transaction Committee (which is comprised of each of our independent directors),
not otherwise interested in the transaction approve the transaction as being fair and reasonable to us and on terms and conditions no less
favorable to us than those available from unaffiliated third parties.
We may engage portfolio entities of Other Blackstone Accounts and Other Blackstone Accounts may engage our portfolio entities to provide
some or all of the following services: (a) corporate support services (including, without limitation, accounts payable, accounting/audit (e.g.,
valuation support services), account management (e.g., treasury, customer due diligence), insurance, procurement, placement, brokerage,
consulting, cash management, corporate secretarial and executive assistant services, domiciliation, data management, directorship
services, finance/budget, human resources (e.g., the onboarding and ongoing development of personnel), communication, public relations
and publicity, information technology and software systems support, corporate governance and entity management (e.g., liquidation,
dissolution and/or otherwise end of term services), risk management and internal compliance/know-your-client reviews and refreshes,
judicial processes, legal, environmental and or sustainability due diligence support (e.g., review of property condition reports, clean energy
consumption), climate accounting services, ESG program management services, engineering services, services related to the sourcing,
development and implementation of renewable energy, ESG data collection and reporting services, capital planning services, operational
coordination (e.g., coordination with JV partners, property managers), risk management, reporting (e.g., on tax, debt, portfolio or other
similar topics), and tax analysis and compliance (e.g., CIT and VAT compliance, transfer pricing, internal risk control, treasury and valuation
services)), business intelligence and data science services, fundraising support, legal/ business/ finance optimization and innovation
(including legal invoice automation), and vendor selection ; (b) borrowing management (including, without limitation, monitoring,
restructuring and work-out of performing, sub-performing and nonperforming loans consolidation, cash management, financing
management, administrative support and lender relationship management (e.g., coordinating with lender on any ongoing obligations under
any relevant borrowing, indebtedness or other credit support (including, any required consultation with or reporting to such lender) , and
whole loan servicing oversight (e.g., collateral management, due diligence and servicing oversight))); (c) management services (i.e.,
management by a portfolio entity, Blackstone affiliate or third party (e.g., a third-party manager) of operational services including personnel
operational coordination (i.e., coordination with JV partners, operating partners, and property managers), planning with respect to portfolio
composition (including hold / sell analysis support), ESG-related planning (including data collection, review, support and execution),
revenue management support and portfolio and property reporting)); (d) operational and other services (i.e., general management of day to
day operations, including, without limitation, construction management and oversight (such as management of general contractors on
capital projects, tenant improvements, and tenant space build-outs), leasing services (such as leasing strategy, management of third-party
brokers, negotiation of major leases, negotiation of leases, and mall income including parking, advertising, and promotional space), project
management (such as management of development projects, project design and execution, vendor management, and turnkey services
(end-to-end execution for real estate projects)) and property management (such as property-level management, cleaning, energy
consumption, security, revenue management, contract management, expense management, capital expenditure projects, facility
management, business plan execution, engineering, capital expenditure design and implementation, and reporting, as well as mall
management services, such as provision of on-site staff, rent collection, service charge accounting and operation, marketing and
advertising, tenant and guest relations, maintenance of common space, selecting and engaging architects, contractors and other third
parties involved in construction, supervision of on-site third-party contractors such as facilities’ maintenance, cleaning, and security, and, in
outlets and high-end centers services, provision of retail managers to oversee tenant merchandising, promotions, and inventory), tracking
Portfolio Entity employees and other advisors utilization and other metrics for fund-level reporting obligations, creating and developing
strategic initiatives and road maps with respect to ESG, consolidating and assisting with ESG and other side letter reporting; and (e)
transaction support services (including, without limitation, acquisition support, customer due diligence and related on-boarding, liquidation,
reporting, relationship management with brokers, banks and other potential sources of investments including development sites and
providing diligence and negotiation support to acquire the same, identifying potential investments, coordinating with investors, assembling
relevant information, conducting financial and market analyses and modelling, coordinating closing/post-closing procedures for acquisitions,
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dispositions and other transactions, coordination of design and development works (such as recommending and implementing design
decisions), marketing and distribution, overseeing brokers, lawyers, accountants and other advisors, working with consultants and third-
parties to pursue entitlements, providing legal, ESG and accounting services, assisting with due diligence, preparation of project feasibility
analysis, site visits, transaction consulting and specification of technical analysis and review of (i) design and structural work, (ii)
architectural, façade and external finishes, (iii) certifications, (iv) operations and maintenance manuals and (v) statutory documents). We
compensate these service providers and vendors owned by the Other Blackstone Accounts for services rendered to us, including through
promote or other incentive-based compensation payable to their management teams and other related parties. The incentive-based
compensation paid with respect to a portfolio entity or property will vary from the incentive based compensation paid with respect to other
portfolio entities and properties; as a result the management team or other related parties may have greater incentives with respect to
certain properties and portfolio entities relative to others, and the performance of certain properties and portfolio entities may provide
incentives to retain management that also service other properties and portfolio entities. Such service providers and vendors may charge
for certain goods and services at rates generally consistent with those available in the market for similar goods and services. The
discussion regarding the determination of market rates below applies equally in respect of the fees and expenses of the portfolio entity
service providers, if charged at rates generally consistent with those available in the market. Such service providers and vendors may also
pass through expenses for other services on a cost reimbursement, no-profit, revenue, purchase and sale price, capital spend, or break-
even basis, (even if third party customers or clients are charged on a different basis), which break-even point may occur over a period of
time such that such service provider or vendor may realize a profit in a given year which would be expected to be applied towards the costs
in subsequent period. In such cases, costs and expenses associated with goods and services provided by service providers and vendors
owned by Other Blackstone Accounts (including for the avoidance of doubt, all overhead associated with such service providers and
vendors owned by Other Blackstone Accounts) are allocated to us and/or the portfolio companies. Such costs and expenses are expected
to include any of the following: salaries, wages, benefits and travel expenses; marketing and advertising fees and expenses; legal,
compliance, accounting and other professional fees and disbursements; office space, furniture and fixtures, and equipment; insurance
premiums; technology expenditures, including hardware and software costs, and servicing costs and upgrades related thereto); costs to
engage recruitment firms to hire employees; diligence expenses; one-time costs, including costs related to building-out, expanding and
winding-down a portfolio property costs that are of a limited duration or non-recurring (such as start-up or technology build-up costs, one-
time technology and systems implementation costs, employee on-boarding, ongoing training and severance payments, and IPO-readiness
and other infrastructure costs); related tax costs and/or liabilities determined by Blackstone based on applicable marginal tax rates; and
other operating, establishment, expansion and capital expenditures (including financing and interest thereon). Any of the foregoing costs,
although allocated in a particular period, will, in certain circumstances, relate to activities occurring outside the period (including in prior
periods, such as where any such costs are amortized over an extended period), and therefore we could pay more than our pro rata portion
of fees for services. In addition, in certain circumstances, Blackstone also relies on the management team of a portfolio entity with respect
to the determination of costs and expenses and allocation thereof and does not oversee or participate in such determinations or allocations.
Moreover, to the extent a portfolio entity uses an allocated cost model with respect to fees, costs and expenses, such fees, costs and
expenses are typically estimated and/or accrued quarterly (or on another regular periodic basis) but not finalized until year-end and as a
result, such year-end true-up is subject to fluctuation and increases such that for a given year, the year-end cumulative amount with respect
to fees, costs and expenses may be greater than the sum of the quarterly estimates (or other periodic estimates where applicable) and/or
accruals and therefore we could bear more fees, costs and expenses at year-end than had been anticipated throughout the year. The
allocation of costs and expenses (including for the avoidance of doubt overhead) among the entities and assets to which services are
provided can be expected to be based on any of a number of different methodologies, including, without limitation, on the basis of “cost” as
described above, “revenue”, “time-allocation”, “per unit”, “revenue,” “spend,” “number of units,” “per square footage” or “fixed percentage” r
purchase or sale price and the particular methodology used to allocate such costs among the entities and assets to which services are
provided is expected to vary depending on the types of services provided and the applicable asset class involved and could, in certain
circumstances, change from one period to another. There can be no assurance that a different manner of allocation would result in our
bearing less or more costs and expenses. In addition, a portfolio entity that uses a "cost" basis methodology may, in certain circumstances,
change its allocation methodology, for example, to charging a flat fee for a particular service or instance (or vice versa) or to another
methodology described herein or otherwise and such changes may increase or reduce the amounts received by such portfolio entities for
the same services. A service provider may subcontract certain of its responsibilities to other portfolio entities. In such circumstances, the
relevant subcontractor could invoice the portfolio entity for fees (or in the case of a cost reimbursement arrangement, for allocable costs
and expenses) in respect of the services provided by the subcontractor. The portfolio entity, if charging on a cost reimbursement, no-profit
or break-even basis, would in turn allocate those costs and expenses as it allocates other fees and expenses as described above. Similarly,
Other Blackstone Accounts, their portfolio entities and Blackstone may engage our portfolio entities, including QTS Realty Trust, Home
Partners of America, American Campus Communities, April Housing and any of our future portfolio entities, to provide services, and these
portfolio entities will generally charge for services in the same manner described above, but we generally will not be reimbursed for any
costs (such as start-up costs) relating to such portfolio entity incurred prior to such engagement.
We, Other Blackstone Accounts and their affiliates are expected to enter into joint ventures with third parties to which the service providers
and vendors described above will provide services. In some of these cases, the joint venture partner may negotiate to not pay its pro rata
share of fees, costs and expenses to be allocated as described above, in which case we, Other Blackstone Accounts and their affiliates that
also use the services of the portfolio entity service provider will, directly or indirectly, pay the difference, or the portfolio entity service
provider will bear a loss equal to the difference. Moreover, in certain circumstances, the joint venture partner may be allocated fees, costs
and expenses pursuant to a different methodology than a portfolio entity’s standard allocation methodology, which could result in us or the
portfolio entities being allocated more fees, costs and expenses than they would otherwise be allocated solely pursuant to such standard
allocation methodology. Portfolio entity service providers described in this section are generally owned and controlled by one or more
Blackstone funds such as Other Blackstone Accounts. In certain instances, a similar company could be owned or controlled by Blackstone
directly. Service providers described in this section are generally owned and controlled by a Blackstone fund, such as the Other Blackstone
Accounts.
Blackstone has a general practice of not entering into any arrangements with advisors, vendors or service providers that provide lower rates
or discounts to Blackstone itself compared to those available to us for the same services. However, legal fees for unconsummated
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24
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Blackstone Real Estate Income Trust
|
transactions are often charged at a discount rate, such that if we consummate a higher percentage of transactions with a particular law firm
than Blackstone, Other Blackstone Accounts and their affiliates, we could indirectly pay a higher net effective rate for the services of that
law firm than Blackstone or Other Blackstone Accounts or their affiliates. Also, advisors, vendors and service providers often charge
different rates or have different arrangements for different types of services. For example, advisors, vendors and service providers often
charge fees based on the complexity of the matter as well as the expertise and time required to handle it. Therefore, to the extent the types
of services used by us are different from those used by Blackstone, Other Blackstone Accounts and their affiliates and personnel, we can be
expected to pay different amounts or rates than those paid by such other persons. Similarly, Blackstone, the Other Blackstone Accounts and
affiliates and we can be expected to enter into agreements or other arrangements with vendors and other similar counterparties (whether
such counterparties are affiliated or unaffiliated with Blackstone) from time to time whereby such counterparty will, in certain circumstances,
charge lower rates (or no fee) or provide discounts or rebates for such counterparty’s products or services depending on the volume of
transactions in the aggregate or other factors.
We have engaged BRE Hotels & Resorts LLC (“BRE Hotels & Resorts”) for certain of our hospitality properties, EQ Management, LLC
(“EQ”) for certain of our office properties, LivCor, LLC (“LivCor”) for certain of our multifamily properties, ShopCore Properties TRS
Management LLC (“ShopCore”) for certain of our retail properties, Link Logistics Real Estate Holdco LLC (“Link”) for certain of our logistics
properties, BPP MFNY Employer LLC (“Beam Living”) for certain of our multifamily properties in New York City and Longview Senior
Housing, LLC (“Longview Senior Housing”) for certain of our senior housing properties. Each of these companies is a portfolio company
controlled or owned by Blackstone-advised investment vehicles.
We have engaged Revantage Corporate Services, LLC (“Revantage”), a portfolio company owned by Blackstone-advised investment
vehicles, to provide, as applicable, corporate support services (including, without limitation, accounting, legal, tax, treasury, valuation
services, information technology and data management), and transaction support services to certain of our investments directly.
Affiliate service provider expenses and incentive compensation awards are included as a component of Rental Property Operating and
Hospitality Operating expense, as applicable, in our Consolidated Statements of Operations. Transaction support service fees were
capitalized to Investments in Real Estate on our Consolidated Balance Sheets. Neither Blackstone nor the Adviser receives any fees from
these arrangements.
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2024 Proxy Statement
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The following table details the amounts incurred for affiliate service providers ($ in thousands):
|
Year Ended December 31, 2023
|
|||||
|
Affiliate Service Provider
Expenses
|
Amortization of Affiliate
Service Provider Incentive
Compensation Awards
|
Capitalized Transaction
Support Services
|
|||
|
Link
|
$
112,963
|
$
18,033
|
$
1,124
|
||
|
LivCor
|
103,104
|
15,949
|
9,532
|
||
|
ShopCore
|
32,966
|
958
|
1,283
|
||
|
Revantage
|
30,880
|
9,103
|
—
|
||
|
BRE Hotels & Resorts
|
15,178
|
1,375
|
—
|
||
|
EQ
|
5,081
|
205
|
711
|
||
|
Beam Living
|
2,931
|
1,114
|
—
|
||
|
Longview Senior Housing
|
1,777
|
—
|
—
|
||
|
Total
|
$
304,880
|
$
46,737
|
$
12,650
|
||
Securities Authorized for Issuance Under Equity Compensation Plans
As noted above, we issue incentive compensation awards to certain employees of portfolio company service providers. Such awards vest
over the life of the awards and stock-based compensation expense is recognized for these awards on a graded vesting attribution method
over the applicable vesting period of each award, based on the value of the awards on their grant date, as adjusted for forfeitures. The
awards are subject to service periods ranging from three to four years. The vesting conditions that are based on us achieving certain
returns, or other key performance metrics, over a stated hurdle amount are considered market conditions. The achievement of returns, or
other key performance metrics, over the stated hurdle amounts, which affect the quantity of awards that vest, is considered a performance
condition. If we determine it is probable that the performance conditions will be met, the value of the award will be amortized over the
service periods, as adjusted for forfeitures. The number of awards expected to vest is evaluated each reporting period and compensation
expense is recognized for those awards for which achievement of the performance criteria is considered probable. As of December 31,
2023, we have determined it is probable that the performance condition will be met for certain awards and have amortized the value of such
awards over the applicable service period. None of Blackstone, the Adviser, or the affiliate portfolio company service providers receive any
incentive compensation from the aforementioned arrangements.
The following table details the incentive compensation awards ($ in thousands):
|
December 31,
2022
|
For the Year Ended December 31, 2023
|
December 31,
2023
|
||||||||||
|
Plan Year
|
Unrecognized
Compensation
Cost
|
Forfeiture of
unvested
awards
|
Value of
Awards
Issued
|
Amortization of
Compensation
Cost
|
Unrecognized
Compensation
Cost
|
Remaining
Amortization
Period
|
||||||
|
2021
|
$
23,161
|
$
(2,946)
|
$
—
|
$
(9,343)
|
$
10,872
|
1.0 year
|
||||||
|
2022
|
24,889
|
(1,115)
|
14,127
|
(19,076)
|
18,825
|
1.9 years
|
||||||
|
2023
|
—
|
—
|
54,955
|
(18,318)
|
36,637
|
2.4 years
|
||||||
|
$
48,050
|
$
(4,061)
|
$
69,082
|
$
(46,737)
|
$
66,334
|
||||||||
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26
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Blackstone Real Estate Income Trust
|
The following table details the incentive compensation awards issued and remaining available as of December 31, 2023.
|
Plan category
|
(a)
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
|
|
(b)
Weighted-average
exercise price of
outstanding options,
warrants and rights
|
|
(c)
Number of securities
remaining available for
future issuance
under equity compensation
plans (excluding securities
reflected in column (a))
|
||||||
|
Equity compensation plans
approved by security holders
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
||
|
Equity compensation plans not
approved by security holders
|
|
—
|
|
|
—
|
|
|
14,220,559
|
|
||
|
Total
|
|
—
|
|
|
—
|
|
|
14,220,559
|
|
||
Blackstone-Affiliated Service Providers
In addition to the service providers (including portfolio entity service providers) and vendors described above, we will engage in transactions
with one or more businesses that are owned or controlled by Blackstone directly, not through one of its funds, including the businesses
described below. These businesses will, in certain circumstances, also enter into transactions with other counterparties of ours. Blackstone
could benefit from these transactions and activities through current income and creation of enterprise value in these businesses.
Furthermore, Blackstone will from time to time encourage our third-party service providers to use other Blackstone-affiliated service
providers and vendors in connection with our business and the business of portfolio entities and unaffiliated entities, and Blackstone has an
incentive to use third-party service providers who do so as a result of the indirect benefit to Blackstone and additional business for the
related service providers and vendors. No fees charged by these service providers and vendors will offset or reduce the Adviser’s
management fees. Furthermore, Blackstone, the Other Blackstone Accounts and their affiliates and related parties will use the services of
these Blackstone affiliates, including at different rates. Although Blackstone believes the services provided by its affiliates are equal or
better than those of third parties, Blackstone directly benefits from the engagement of these affiliates, and there is therefore an inherent
conflict of interest.
Blackstone-affiliated service providers and vendors, include, without limitation:
LNLS. Lexington National Land Services (“LNLS”) is a Blackstone affiliate that (i) acts as a title agent in facilitating and issuing title
insurance, (ii) provides title support services for title insurance underwriters, and (iii) acts as escrow agent in connection with investments
by us, Other Blackstone Accounts and their affiliates and related parties, and third parties. In exchange for such services LNLS earns fees,
which would have otherwise been paid to third parties. If LNLS is involved in a transaction in which we participate, LNLS will benchmark
such fees to the extent market data is available except when LNLS is providing such services in a state where the insurance premium or
escrow fee, as applicable, is regulated by the state or when LNLS is part of a syndicate of title insurance companies where the insurance
premium is negotiated by other title insurance underwriters or their agents. During the fiscal year ended December 31, 2023, we paid LNLS
$7.7 million for title services related to 53 investments.
Certain Blackstone-affiliated service providers and their respective personnel will receive a management promote, an incentive fee and
other performance-based compensation in respect of our investments or overall performance, which could be in the form of shares of our
common stock. Furthermore, Blackstone-affiliated service providers can be expected to charge costs and expenses based on allocable
overhead associated with personnel working on relevant matters (including salaries, benefits and other similar expenses), provided that
these amounts will not exceed market rates as determined to be appropriate under the circumstances. Generally, we may engage
Blackstone-affiliated service providers only if a majority of our Board of Directors, and a majority of the Affiliate Transaction Committee
(which is comprised of each of our independent directors), not otherwise interested in the transaction approve the transaction as being fair
and reasonable to us and on terms and conditions no less favorable to us than those available from unaffiliated third parties.
The Adviser and its affiliates will make determinations of market rates (i.e., rates that fall within a range that the Adviser and its affiliates has
determined is reflective of rates in the applicable market and certain similar markets, though not necessarily equal to or lower than the
median rate of comparable firms) based on its consideration of a number of factors, which are generally expected to include the experience
of the Adviser and its affiliates with non-affiliated service providers as well as benchmarking data and other methodologies determined by
the Adviser and its affiliates to be appropriate under the circumstances. In respect of benchmarking, while Blackstone often obtains
benchmarking data regarding the rates charged or quoted by third parties for services similar to those provided by Blackstone affiliates in
the applicable market or certain similar markets, relevant comparisons may not be available for a number of reasons, including, without
limitation, as a result of a lack of a substantial market of providers or users of such services or the confidential or bespoke nature of such
services (e.g., within property management services, different assets may receive different property management services). In addition,
benchmarking data is based on general market and broad industry overviews, rather than determined on an asset by asset basis. As a
result, benchmarking data does not take into account specific characteristics of individual assets then owned or to be acquired (such as
location or size), or the particular characteristics of services provided. For these reasons, such market comparisons may not result in
precise market terms for comparable services. Expenses to obtain benchmarking data will be borne by us or by Other Blackstone Accounts
and will not offset the management fee we pay to the Adviser. Finally, in certain circumstances third-party benchmarking may be considered
unnecessary, including because the price for a particular good or service is mandated by law (e.g., title insurance in rate regulated states).
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2024 Proxy Statement
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27
|
In addition, Blackstone is not required to perform or obtain benchmarking analysis of expenses with respect to non-recurring contracts with
portfolio entity service providers and will exclude non-recurring costs from benchmarking analysis when such analysis is required, unless
otherwise required by our charter. Blackstone is not required to perform or obtain benchmarking analysis or third-party verification of
expenses with respect to services provided by portfolio entity service providers on a cost reimbursement, no-profit or break-even basis, or
in respect of incentive-based compensation, unless otherwise required by our charter. Some of the services performed by Blackstone-
affiliated service providers could also be performed by our sponsor from time to time and vice versa. Fees paid by us to Blackstone-
affiliated service providers do not offset or reduce the management fee we pay to the Adviser and are not otherwise shared with us.
On July 28, 2020, we became a member of a captive insurance company (the “Captive”) owned by us and other investment vehicles
managed by Blackstone. A Blackstone affiliate provides oversight and advisory services to the Captive and receives fees based on a
percentage of premiums paid for such policies. The fees and expenses of the Captive, including insurance premiums and fees paid to the
Blackstone affiliate to manage it, are borne by the Company and the other Blackstone-managed investment vehicles pro rata based on
insurance premiums paid for each party’s respective properties.
During the year ended December 31, 2023, we contributed $166.2 million capital to the Captive for insurance premiums and our pro rata
share of other expenses. Of this amount, $3.2 million was attributable to the fee paid to a Blackstone affiliate to provide oversight and
management services. The capital contributed and fees paid to the Captive are in place of insurance premiums and fees that would
otherwise be paid to third-party insurance companies.
Internal Audit Services
During the year ended December 31, 2023, we engaged an affiliate of our Adviser to perform certain internal audit and compliance
functions. As of December 31, 2023, we had incurred $80,333 of fees for such services.
Credit Agreement with Blackstone
We are party to an unsecured, uncommitted line of credit up to a maximum amount of $75.0 million with Blackstone Holdings Finance Co.
L.L.C. (“Lender”),
an affiliate of Blackstone. The line of credit expires on January 24, 2025 and may be extended for up to 12 months subject to Lender
approval. The interest rate is the then-current rate offered by a third-party lender, or, if no such rate is available, SOFR rate plus 2.50%.
Each advance under the Line of Credit is repayable on the earliest of (i) the expiration of the Line of Credit, (ii) Lender’s demand and (iii)
the date on which the Adviser no longer acts as the Company’s external manager, provided that the Company will have 180 days to make
such repayment in the cases of clauses (i) and (ii) and 45 days to make such repayment in the case of clause (iii). During the year ended
December 31, 2023, we did not draw from the line of credit. As of December 31, 2023, there was no outstanding balance under the line of
credit.
Trademark License Agreement
On August 31, 2016, we entered into a Trademark License Agreement (the “Trademark License Agreement”) with an affiliate of Blackstone,
pursuant to which it has granted us a fully paid-up, royalty-free, non-exclusive,non-transferable license to use the names “Blackstone Real
Estate Income Trust, Inc.,” “BREIT” or “Blackstone Operating Partnership L.P.” Under the Trademark License Agreement, we have a right to
use these names for so long as the Adviser (or another affiliate of Blackstone that serves as the licensor) serves as the Adviser (or another
managing entity) and the Adviser remains an affiliate of the licensor under the Trademark License Agreement. We do not make any
payments under the Trademark License Agreement.
Real Estate Debt
In November 2023, in a partnership alongside other Blackstone-advised investment vehicles as well as third-party investors, we agreed to
acquire 3.08% interest in a portfolio of first mortgage loans for approximately $200 million. This transaction closed in December 2023.
As of December 31, 2023, our investments in real estate debt included CMBS with a total fair value of $1.5 billion collateralized by
properties owned by Blackstone-advised investment vehicles. Each investment in such CMBS by Blackstone and its affiliates (including us)
represented a minority participation in any individual tranche. We acquired our minority participation interests from third-party investment
banks on market terms negotiated by the majority third-party investors. Blackstone and its affiliates (including us) will forgo all non-
economic rights (including voting rights) in such CMBS as long as the Blackstone-advised investment vehicles either own the properties
collateralizing, loans underlying, or have an interest in a different part of the capital structure related to such CMBS. For the year ended
December 31, 2023, we recorded income of $167.9 million related to our investments in such CMBS. For the year ended December 31,
2023, we sold $0.2 billion of such CMBS.
As of December 31, 2023, our investments in real estate debt included loans with a total fair value of $0.6 billion to borrowers owned by
Blackstone-advised investment vehicles. Each investment in such loans by Blackstone and its affiliates (including us) represented a
minority participation in any individual loan. We acquired our minority interests from either third-party investors in the secondary market or
from third-party investment banks on market terms negotiated by the majority third-party investors. Blackstone and its affiliates (including
us) will forgo all non-economic rights (including voting rights) in such loans as long as the Blackstone-advised investment vehicles either
own the properties collateralizing, loans underlying, or have an interest in a different part of the capital structure related to such properties.
For the year ended December 31, 2023, we recorded income of $96.7 million related to our investments in such loans. In addition, we
previously acquired a minority participation in a loan to a borrower owned by Blackstone-advised investment vehicles for €300 million, and
in January 2024, as part of an extension for financing for loan secured by assets owned by such Blackstone-advised vehicles, we agreed to
the restructuring of the loan and subsequent sale of part of the loan to a borrower owned by Blackstone-advised investment vehicles for
$111.0 million. The pricing and terms were negotiated by the third-party lender, and we participated on the same terms.
|
28
|
Blackstone Real Estate Income Trust
|
Real Estate Transactions
In March 2023, we agreed to dispose of our 7.9% interest in a logistics business to a Blackstone-advised investment vehicle and certain of
its co-investors for $547 million, excluding transaction costs. This transaction closed in the second quarter of 2023.
In October 2023, we agreed to dispose of our approximately 12.0% interest in a cell tower platform to third-party investors and Blackstone-
advised investment vehicles for $692 million, excluding transaction costs. This transaction closed in the first quarter of 2024.
In January 2024, in a partnership alongside a Blackstone-advised investment vehicle, we agreed to participate in an acquisition of a
Canadian public company that primarily invests in multi-family and single-family rental assets. We previously made an investment of $240
million in exchangeable preferred equity investment in such company in 2020 and are maintaining our approximately 11% ownership stake.
In addition, we entered into a support agreement whereby we agreed to exchange certain of our preferred equity into common shares and
vote in favor of the transaction. The transaction is expected to close in the second quarter of 2024.
Indemnification Agreements with Directors and Officers
We have entered into indemnification agreements with each of our directors and officers. We refer to such indemnification agreements as
“Indemnification Agreements” and our directors and officers party thereto as “Indemnitees.” The Indemnification Agreements provide that we
will, subject to certain limitations and exceptions, indemnify, to the fullest extent permitted under Maryland law, and advance expenses to,
each Indemnitee, in connection with (among other things) the Indemnitee’s capacity as a director, officer, employee or agent of the
Company. This obligation includes, subject to certain terms and conditions, indemnification for any expenses (including reasonable
attorneys’ fees), judgments, fines, penalties and settlement amounts actually and reasonably incurred by the Indemnitee in connection with
any threatened or pending action, suit or proceeding. In certain instances, we may be required to advance such expenses, in which case,
the Indemnitee will be obligated to reimburse us for the amounts advanced if it is later determined that the Indemnitee is not entitled to
indemnification for such expenses.
Conflicts of Interest with the Adviser and its Affiliates
We are subject to conflicts of interest arising out of our relationship with Blackstone, including the Adviser and its affiliates. Blackstone has
four directors that serve on our Board of Directors (one of whom serves as Chairperson of our Board of Directors), and our Chief Executive
Officer, Chief Financial Officer, and our other executive officers are also executives of Blackstone and/or one or more of its affiliates. There
is no guarantee that the policies and procedures adopted by us, the terms of our charter, the terms and conditions of the Advisory
Agreement or the policies and procedures adopted by the Adviser, Blackstone and their affiliates, will enable us to identify, adequately
address or mitigate these conflicts of interest. Notwithstanding the foregoing, we believe our directors, officers, and the Adviser’s personnel
will devote a sufficient amount of time to our business to fulfill their responsibilities to us. Transactions between us and the Adviser or its
affiliates are subject to approval by our Affiliate Transaction Committee.
Some examples of conflicts of interest that may arise by virtue of our relationship with the Adviser and Blackstone include:
■
Broad and Wide-Ranging Activities
. The Adviser, Blackstone and their affiliates engage in a broad spectrum of activities, including a
broad range of activities relating to investments in the real estate industry, and have invested or committed billions of dollars in capital
through various investment funds, managed accounts and other vehicles affiliated with Blackstone. In the ordinary course of their
business activities, the Adviser, Blackstone and their affiliates may engage in activities where the interests of certain divisions of
Blackstone and its affiliates, including the Adviser, or the interests of their clients may conflict with the interests of our stockholders.
Certain of these divisions and entities affiliated with the Adviser have or may have investment objectives or guidelines similar to our
investment guidelines and therefore may compete with us. In particular, Blackstone Real Estate invests in a broad range of real estate
and real estate debt investments via numerous different investment funds, managed accounts and other vehicles.
■
Blackstone’s Policies and Procedures
. Blackstone has implemented policies and procedures to address conflicts that arise as a result
of its various activities, as well as regulatory and other legal considerations. Because Blackstone has many different asset management
and advisory businesses, including private equity, growth equity, a credit business, a hedge fund business, a capital markets group, a life
sciences business and a real estate advisory business, it is subject to a number of actual and potential conflicts of interest, greater
regulatory oversight and more legal and contractual restrictions than it would otherwise be subject to if it had just one line of business. In
addressing these conflicts and regulatory, legal and contractual requirements across its various businesses and to protect against the
inappropriate sharing and/or use of information between Blackstone Real Estate and the other business units at Blackstone, Blackstone
has implemented certain policies and procedures (e.g., Blackstone’s information wall policy) regarding the sharing of information which
have the potential to reduce the positive synergies and collaborations that the Adviser could otherwise expect to utilize for purposes of
identifying, pursuing and managing attractive investments. For example, Blackstone will from time to time come into possession of
material non-public information with respect to companies in which other advisory clients of Blackstone may be considering making an
investment or companies that are clients of Blackstone. As a consequence, that information, which could be of benefit to the Adviser,
might become restricted to those other respective businesses and otherwise be unavailable to the Adviser. There can be no assurance,
however, that any such policies and/or procedures will be effectivein accomplishing their stated purpose and/or that they will not
otherwise adversely affect the ability of the Adviser to effectively achieve our investment objectives by unduly limiting our investment
flexibility and/or the flow of otherwise appropriate information between the Adviser and other business units at Blackstone. For example,
in some instances, personnel of Blackstone would be unable to assist with the activities of the Adviser as a result of these walls. There
can be no assurance that additional restrictions will not be imposed that would further limit the ability of Blackstone to share information
internally. In addition, due to these restrictions, in some instances, the Adviser may not be able to initiate a transaction that it otherwise
might have initiated and may not be able to purchase or sell an investment that it otherwise might have purchased or sold, which could
negatively affect our operations.
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2024 Proxy Statement
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29
|
In addition, to the extent that Blackstone is in possession of material non-public information or is otherwise restricted from trading in
certain securities, we and the Adviser may also be deemed to be in possession of such information or otherwise restricted. Additionally,
the terms of confidentiality or other agreements with or related to companies in which any investment vehicle advised by Blackstone has
or has considered making an investment or which is otherwise a client of Blackstone will from time to time restrict or otherwise limit the
ability of Blackstone or its affiliates, including the Adviser, to engage in businesses or activities competitive with such companies.
Blackstone reserves the right to enter into one or more strategic relationships in certain regions or with respect to certain types of
investments that, although intended to provide greater opportunities for the Company, may require the Company to share such
opportunities or otherwise limit the amount of an opportunity the Company can otherwise take.
■
Allocation of Investment Opportunities
. Certain inherent conflicts of interest arise from the fact that Blackstone and its affiliates,
including the Adviser, will provide investment management and other services to us and to other persons or entities, whether or not the
investment objectives or guidelines of any such other person or entity are similar to ours, including, without limitation, the sponsoring,
closing and/or managing of Other Blackstone Accounts. In particular, there will be overlap of real estate and real estate debt investment
opportunities with certain Other Blackstone Accounts that are actively investing and similar overlap with future Other Blackstone
Accounts. This overlap will from time to time create conflicts of interest. Additionally, in certain circumstances investment opportunities
suitable for us will not be presented to us and there will be investment opportunities where our participation is restricted.
With respect to Other Blackstone Accounts with investment objectives or guidelines that overlap with ours but that do not have priority
over us (including the Private Core+ Accounts), investment opportunities are allocated among us and one or more Other Blackstone
Accounts in accordance with our sponsor’s prevailing policies and procedures on a basis that the Adviser and its affiliates believe to be
fair and reasonable in their sole discretion, which may be pro rata based on relative available capital, subject to the following
considerations: (i) consistency with any applicable investment objectives or focus of ours and such Other Blackstone Accounts (which,
for us, includes our primary objective of providing attractive current income in the form of regular, stable cash distributions), (ii) any
investment limitations, parameters or contractual provisions of ours and such Other Blackstone Accounts (e.g., a joint venture between
us and an Other Blackstone Account must be on substantially similar terms), (iii) the sector, geography/location, expected return profile,
expected distribution rates, anticipated cash flows, expected stability or volatility of cash flows, leverage profile, risk profile, and other
features of the applicable investment opportunity and its impact on portfolio concentration and diversification (including, but not limited
to, (A) allocations necessary for us or Other Blackstone Accounts to maintain a particular concentration in a certain type of investment
(e.g., if an Other Blackstone Account follows a liquid strategy pursuant to which it sells a type of investment more or less frequently than
us and we or such Other Blackstone Account needs a non pro rata additional allocation to maintain a particular concentration in that type
of investment) and (B) whether a particular fund already has its desired exposure to the investment, sector, industry, geographic region
or markets in question), (iv) maintaining structuring and financing flexibility for shared investments (which can result in sharing an
investment opportunity equally to the extent each party has sufficient available capital to do so), (v) avoiding allocation that could result
in de minimis or odd lot investments, or allocating to a single vehicle when investments are smaller in size and (vi) legal, tax, accounting,
regulatory and other considerations deemed relevant by the Adviser and its affiliates (including, without limitation, maintaining our
qualification as a REIT and our status as a non-investment company exempt from the Investment Company Act).
Currently, Private Core+ Accounts invest in “Core+” real estate and real estate-related assets in the United States and Canada (which
are generally substantially stabilized assets generating relatively stable cash flow), with a focus on office, multifamily, industrial, retail
and life sciences assets in major cities and markets across the United States and Canada. To the extent an investment is determined by
Blackstone to satisfy the investment objectives of us and the Private Core+ Accounts, such investment will be generally allocated in
accordance with Blackstone’s prevailing policies and procedures described above. Certain Other Blackstone Accounts also invest in real
estate debt with investment objectives or guidelines that overlap with ours but do not have priority over us. To the extent an investment is
determined by Blackstone to satisfy the investment objectives of us and such Other Blackstone Accounts, such investment will be
allocated in accordance with Blackstone’s prevailing policies and procedures described above.
Furthermore, the Select Opportunistic Blackstone Accounts invest in “opportunistic” real estate and real estate-related assets globally
(which often are undermanaged assets and with higher potential for equity appreciation) and have priority over us with respect to such
investment opportunities and select investments (e.g., certain core+ life sciences investments, private real estate loans, European and
infrastructure investments) will be first offered to certain Other Blackstone Accounts (which we generally expect to have investment
strategies distinct from ours but can overlap to some extent). Other Blackstone Accounts having priority over us will result in fewer
investment opportunities being made available to us.
The Adviser and its affiliates calculate available capital, weigh the factors described above (which will not be weighted equally) and make
other investment allocation decisions in accordance with their prevailing policies and procedures in their sole discretion, taking into
account a variety of considerations, which may include, without limitation, net asset value, any actual or anticipated allocations, expected
future fundraising and uses of capital, expected investor and other third-party co-investment allocation (i.e., when additional capital is
raised alongside a private fund for a single investment) of Other Blackstone Accounts, applicable investment guidelines, excuse rights
and investor preferences, any or all reserves, vehicle sizes and stage of investment operations (e.g., early in a vehicle’s investment
operations, the vehicle may receive larger allocations than it otherwise would in connection with launching and ramping up), targeted
amounts of securities as determined by the Adviser and its affiliates, geographic limitations and actual or anticipated capital needs or
other factors determined by the Adviser and its affiliates. Preliminary investment allocation decisions will generally be made on or prior to
the time we and such Other Blackstone Accounts commit to make the investment (which in many cases is when the purchase agreement
(or equivalent) in respect of such investment opportunity is signed), and are expected to be updated from time to time prior to the time of
consummation of the investment (including after deposits are made thereon) due to changes in the factors that Blackstone considers in
making investment allocations among us and Other Blackstone Accounts, including, for example, due to changes in available capital
(including as a result of investor subscriptions or withdrawals, deployment of capital for other investments or a reassessment of
reserves), changes in portfolio composition or changes in actual or expected investor or third-party co-investment allocation, in each
case between the time of committing to make the investment and the actual funding of the investment. Such adjustments in investment
allocations could be material, could result in a reduced or increased allocation being made available to us and there can be no
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Blackstone Real Estate Income Trust
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assurance that we will not be adversely affected thereby. The manner in which our available capital is determined may differ from, or
subsequently change with respect to, Other Blackstone Accounts. The amounts and forms of leverage utilized for investments will also
be determined by the Adviser and its affiliates in their sole discretion. Any differences or adjustments with respect to the manner in which
available capital is determined with respect to us or Other Blackstone Accounts may adversely impact our allocation of particular
investment opportunities. There is no assurance that any conflicts arising out of the foregoing will be resolved in our favor. Blackstone is
entitled to amend its policies and procedures at any time without prior notice or our consent.
The Adviser makes good faith determinations for allocation decisions based on expectations that will, in certain circumstances, prove
inaccurate. Information unavailable to the Adviser, or circumstances not foreseen by the Adviser at the time of allocation, may cause an
investment opportunity to yield a different return than expected. For example, an investment opportunity that the Adviser determines to
be consistent with the return objectives of an opportunistic “control-oriented” fund rather than the Company could fail to achieve the
Adviser’s expectations and underwriting and generate an actual return that would have been appropriate for the Company. Conversely,
an investment that the Adviser expects to be consistent with the Company’s return objectives will, in certain circumstances, exceed
them. Furthermore, in certain circumstances where the Company is participating alongside one or more Other Blackstone Accounts in an
investment opportunity, the Adviser is expected to be required to make initial investment allocation decisions at the time of the signing of
the related purchase agreement (or equivalent) and/or funding of the deposit in respect thereof. The Adviser could change the applicable
investment allocations as between the Company and such Other Blackstone Accounts between such signing and funding and the closing
of such investment opportunity as it determines appropriate based on a number of factors, including but not limited to (i) changes in
available capital (taking into account changes in capital commitment subscriptions, redemptions and/or repurchase requests, transfers,
deployment of capital, reserves for future investments among other factors) and (ii) prevailing concentration limits in respect of sector,
industry, geographic region or markets in question. In such circumstances, the Company’s and such Other Blackstone Accounts’
respective obligations related to any deposit and transaction costs (including broken deal fees and expenses) would be expected to
change accordingly, provided that any such adjustments, particularly in respect of funded deposits, are expected to occur at the time of
the closing of the investment and interest or other additional amounts will not be due or payable in respect of any such adjustments. In
addition, the Adviser could determine at any point prior to the closing of an investment opportunity that any such investment opportunity
that was initially allocated to the Company based on information available to the Company at the time the allocation decision is made
should subsequently be reallocated in whole or in part to one or more Other Blackstone Accounts (and vice versa) based on subsequent
information received by the Adviser in respect of such investment opportunity (e.g., an investment opportunity that the Adviser initially
determines to be consistent with the return objectives of the Company could subsequently be determined to be consistent with the return
objectives of an opportunistic “control-oriented” fund). In such circumstances, the Adviser could determine to reallocate all or any portion
of any such investment opportunity from the Company to such Other Blackstone Account (or vice versa), including in circumstances
where such Reallocating Account has entered into an exclusivity arrangement or other binding agreement with one or more third parties.
In such cases, if the non-Reallocating Account agrees to pursue the investment, it will reimburse the Reallocating Account for any
deferred acquisition costs (including non-refundable or refundable deposits, breakage fees, due diligence costs and other fees and
expenses) incurred by the Reallocating Account relating to such Reallocated Investment, which may be so reallocated prior to closing.
While the Adviser will seek to manage potential conflicts of interest in a fair and reasonable manner (subject to any priorities of Other
Blackstone Accounts) as required pursuant to our charter and the Advisory Agreement, the portfolio strategies employed by the Adviser,
Blackstone or their affiliates in managing the Other Blackstone Accounts could conflict with the strategies employed by the Adviser in
managing our business and may adversely affect the marketability, exit strategy, prices and availability of the properties, securities and
instruments in which we invest. The Adviser, Blackstone or their affiliates may also give advice to the Other Blackstone Accounts that
may differ from advice given to us even though their investment objectives or guidelines may be the same or similar to ours.
■
Corporate Opportunities
. Our Board of Directors has adopted a resolution that provides that none of Blackstone or its affiliates, our
directors or any person our directors control are required to refrain directly or indirectly from engaging in any business opportunities,
including any business opportunities in the same or similar business activities or lines of business in which we or any of our affiliates
may from time to time be engaged or propose to engage, or from competing with us, and that we renounce any interest or expectancy in,
or in being offered an opportunity to participate in, any such business opportunities, unless offered to a person in his or her capacity as
one of our directors or officers and intended exclusively for us or any of our subsidiaries.
■
Investments in Different Levels or Classes of an Issuer’s Securities
. From time to time, to the extent permitted by our charter, we
and the Other Blackstone Accounts may make investments at different levels of an issuer’s or borrower’s capital structure (e.g., an
investment by one or more Other Blackstone Accounts in an equity, debt or mezzanine interest with respect to the same portfolio
company in which we own a different debt interest or vice versa) or otherwise in different classes of the same issuer’s securities. We
may make investments that are senior or junior to, or have rights and interests different from or adverse to, the investments made by the
Other Blackstone Accounts (and in certain circumstances, the Adviser will be unaware of Other Blackstone Accounts’ participation, as a
result of information walls or otherwise). Such investments may conflict with the interests of such Other Blackstone Accounts in related
investments, and the potential for any such conflicts of interests may be heightened in the event of a default or restructuring of any such
investments. Actions may be taken for Other Blackstone Accounts that are adverse to us, including with respect to the timing and
manner of sale and actions taken in circumstances of financial distress. In addition, in connection with such investments, Blackstone will
generally seek to implement certain procedures to mitigate conflicts of interest which typically involve us maintaining a non-controlling
interest in any such investment and a forbearance of rights, including certain non-economic rights, relating to Other Blackstone
Accounts, such as where Blackstone may cause us to decline to exercise certain control- and/or foreclosure-related rights with respect to
an investment (including following the vote of other third-party lenders generally or otherwise recusing ourselves with respect to
decisions), including with respect to both normal course ongoing matters (such as consent rights) and also defaults, foreclosures,
workouts, restructurings and/or exit opportunities, subject to certain limitations. If we recuse ourselves from decision-making as
described above, we will generally rely upon a third-party lender to make the decisions, and the third-party lender could have conflicts or
otherwise make decisions that we would not have made. It is expected that our participation in connection with any such investments
and transactions will be negotiated by third parties on market terms and prices. Furthermore, we hold investments (i) that are secured or
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backed by collateral in which Other Blackstone Accounts have interests and (ii) where Other Blackstone Accounts are invested in other
parts of the capital structure. While Blackstone will seek to resolve any such conflicts in a fair and equitable manner in accordance with
its prevailing policies and procedures with respect to conflicts resolution among the Other Blackstone Accounts, such transactions are
not required to be presented to our Board of Directors for approval (unless otherwise required by our charter or investment guidelines),
and there can be no assurance that any conflicts will be resolved in our favor.
■
Minority Investments of Other Blackstone Accounts
. Certain Other Blackstone Accounts may also make minority investments in
third-party investment managers or their investment vehicles with which we may engage in various transactions from time to time,
including purchases or sales of assets or borrowing or lending transactions. Although these third-party investees may not be deemed to
be affiliates of Blackstone due to the limited voting rights or other terms of the investments made by such Other Blackstone Accounts,
such Other Blackstone Accounts would have an indirect economic interest in any transactions between us and such third-party
investees. Our stockholders will not share in any of the economic interest of such Other Blackstone Accounts in such transactions. There
can be no assurance that any conflict will be resolved in our favor and Blackstone may be required to take action where it will have
conflicting loyalties between its duties to us and to Other Blackstone Accounts, which may adversely impact us.
■
Pursuit of Differing Strategies
. At times, the investment professionals employed by the Adviser or its affiliates and other investment
vehicles affiliated with the Adviser and/or Blackstone may determine that an investment opportunity may be appropriate for only some of
the Other Blackstone Accounts for which he or she exercises investment responsibility, or may decide that certain of Other Blackstone
Accounts should take differing positions with respect to a particular security. In these cases, the investment professionals may place
separate transactions for one or more Other Blackstone Accounts which may affect the market price of the security or the execution of
the transaction, or both, to the detriment or benefit of one or more Other Blackstone Accounts. For example, an investment professional
may determine that it would be in the interest of Other Blackstone Accounts to sell a security that we hold long, potentially resulting in a
decrease in the market value of the security held by us.
■
Variation in Financial and Other Benefits
. A conflict of interest arises where the financial or other benefits available to the Adviser or
its affiliates differ among the Other Blackstone Accounts that they manage. If the amount or structure of the management fee, the
Special Limited Partner’s performance participation interest and/or the Adviser’s or its affiliates’ compensation differs among Other
Blackstone Accounts (such as where certain funds or accounts pay higher base management fees, incentive fees, performance-based
management fees or other fees), the Adviser might be motivated to help certain Other Blackstone Accounts over others. Similarly, the
desire to maintain assets under management or to enhance the Adviser’s performance record or to derive other rewards, financial or
otherwise, could influence the Adviser or its affiliates in affording preferential treatment to those Other Blackstone Accounts that could
most significantly benefit the Adviser or its affiliates. The Adviser may, for example, have an incentive to allocate favorable or limited
opportunity investments or structure the timing of investments to favor such Other Blackstone Accounts. Additionally, the Adviser or its
affiliates might be motivated to favor Other Blackstone Accounts in which it has an ownership interest or in which Blackstone and/or its
affiliates have ownership interests. Conversely, if an investment professional at the Adviser or its affiliates does not personally hold an
investment in the fund but holds investments in Other Blackstone Accounts, such investment professional’s conflicts of interest with
respect to us may be more acute.
■
Underwriting, Advisory and Other Relationships
. As part of its regular business, Blackstone provides a broad range of underwriting,
investment banking, placement agent services and other services and may come into possession of information that limits its ability to
engage in potential transactions. Our activities may be constrained as a result of the inability of Blackstone personnel to use such
information. For example, employees of Blackstone not serving as employees of the Adviser or its affiliates may be prohibited by law or
contract from sharing information with members of Blackstone Real Estate. We may be forced to sell or hold existing investments as a
result of investment banking relationships or other relationships that Blackstone may have or transactions or investments that Blackstone
may make or has made. Additionally, there may be circumstances in which one or more individuals associated with Blackstone will be
precluded from providing services to the Adviser because of certain confidential information available to those individuals or to other
parts of Blackstone. Further, in connection with selling investments by way of a public offering, a Blackstone broker-dealer has acted and
may in the future act as the managing underwriter or a member of the underwriting syndicate on a firm commitment basis and has
purchased and may in the future purchase securities on that basis. Blackstone may retain any commissions, remuneration, or other
profits and receive compensation from such underwriting activities, which have the potential to create conflicts of interest. Blackstone
may also participate in underwriting syndicates from time to time with respect to us or portfolio companies of Other Blackstone Accounts,
or may otherwise be involved in the private placement of debt or equity securities issued by us or such portfolio companies, or otherwise
in arranging financings with respect thereto or advising on such transactions. Subject to applicable law, Blackstone may receive
underwriting fees, placement commissions, or other compensation with respect to such activities, which will not be shared with us or our
stockholders. Where Blackstone serves as underwriter with respect to the securities of a portfolio, we or the applicable Other Blackstone
Account holding such securities may be subject to a “lock-up” period following the offering under applicable regulations during which time
our ability to sell any securities that we continue to hold is restricted. This may prejudice our ability to dispose of such securities at an
opportune time.
In the regular course of its investment banking business, Blackstone represents potential purchasers, sellers and other involved parties,
including corporations, financial buyers, management, shareholders and institutions, with respect to assets that are suitable for
investment by us. In such case, Blackstone’s client would typically require Blackstone to act exclusively on its behalf, thereby precluding
us from acquiring such assets. Blackstone is under no obligation to decline any such engagement to make the investment opportunity
available to us.
Blackstone has long-term relationships with a significant number of corporations and their senior management. In determining whether to
invest in a particular transaction on our behalf, the Adviser may consider those relationships (subject to its obligations under our charter
and the Advisory Agreement), which may result in certain transactions that the Adviser will not undertake on our behalf in view of such
relationships.
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■
Service Providers
. Certain of our service providers (including lenders, brokers, attorneys, loan servicing and administration providers,
investment banking firms and property managers) may be sources of investment opportunities, counterparties therein or advisors with
respect thereto. This may influence the Adviser in deciding whether to select such a service provider. In addition, in instances where
multiple Blackstone businesses may be exploring a potential individual investment, certain of these service providers may choose to be
engaged by other Blackstone affiliates rather than us.
■
Material, Non-Public Information
. We, directly or through Blackstone, the Adviser or certain of their respective affiliates may come into
possession of material non-public information with respect to an issuer or borrower in which we have invested or may invest. Should this
occur, the Adviser may be restricted from buying or selling securities, derivatives or loans of the issuer or borrower on our behalf until
such time as the information becomes public or is no longer deemed material. Disclosure of such information to the personnel
responsible for management of our business may be on a need-to-know basis only, and we may not be free to act upon any such
information. Therefore, we and/or the Adviser may not have access to material non-public information in the possession of Blackstone
which might be relevant to an investment decision to be made by the Adviser on our behalf, and the Adviser may initiate a transaction or
purchase or sell an investment that, if such information had been known to it, may not have been undertaken. Due to these restrictions,
in some instances, the Adviser may not be able to initiate a transaction on our behalf that it otherwise might have initiated and may not
be able to purchase or sell an investment that it otherwise might have purchased or sold, which could negatively affect our operations.
■
Possible Future Activities
. The Adviser and its affiliates may expand the range of services that they provide over time. Except as and
to the extent expressly provided in the Advisory Agreement, the Adviser and its affiliates will not be restricted in the scope of its business
or in the performance of any such services (whether now offered or undertaken in the future) even if such activities could give rise to
conflicts of interest, and whether or not such conflicts are described herein. The Adviser, Blackstone and their affiliates continue to
develop relationships with a significant number of companies, financial sponsors and their senior managers, including relationships with
clients who may hold or may have held investments similar to those intended to be made by us. These clients may themselves represent
appropriate investment opportunities for us or may compete with us for investment opportunities.
■
Transactions with Other Blackstone Accounts and Other Affiliates
. From time to time, we may enter into purchase and sale
transactions and joint ventures with Other Blackstone Accounts. Such transactions will be conducted in accordance with, and subject to,
our charter (including the requirement that such transaction be approved by a majority of our independent directors as being fair and
reasonable to us), the terms and conditions of the Advisory Agreement, and our code of business conduct and ethics and applicable laws
and regulations. These requirements will also apply to transactions with Blackstone, any of our directors or any affiliates thereof.
■
Other Affiliate Transactions
. In connection with investments in which we participate alongside Other Blackstone Accounts, we may
from time to time share certain rights with such Other Blackstone Accounts relating to such investments for legal, tax, regulatory or other
similar reasons, including, in certain instances, certain control-related rights with respect to jointly held investments. When making any
decisions related to such investments, there may be conflicting interests. There can be no assurance that the return on our investment
will be equivalent to or better than the returns obtained by Blackstone or its other affiliates.
■
Broken Deal Expenses
. Any expenses that may be incurred by the Company for actual investments as described herein may also be
incurred by the Company with respect to broken deals (i.e., investments that are not consummated). The Adviser is not required to and
in most circumstances will not seek reimbursement of broken deal expenses (i.e., expenses incurred in pursuit of an investment that is
not consummated) from third parties, including counterparties to the potential transaction or potential co-investors. Examples of such
broken deal expenses include, but are not limited to, reverse termination fees, extraordinary expenses such as litigation costs and
judgments, meal, travel and entertainment expenses incurred, deposits or down payments which are forfeited in connection with
unconsummated transactions, costs of negotiating co-investment documentation (including non-disclosure agreements with
counterparties), the costs from onboarding (i.e., KYC) investment entities with a financial institution, and legal, accounting, tax and other
due diligence and pursuit costs and expenses. Any such broken deal expenses could, in the sole discretion of the Adviser, be allocated
solely to the Company and not to Other Blackstone Accounts or co-investment vehicles (including committed co-investment vehicles)
that could have made the investment (including any situation where an Other Blackstone Client was initially allocated an investment
opportunity and incurred such expenses before such investment opportunity was reallocated to the Company), even when the Other
Blackstone Account or co-investment vehicle commonly invests alongside the Company in its investments or Blackstone or Other
Blackstone Accounts in their investments. In such cases the Company’s share of expenses would increase. In the event broken deal
expenses are allocated to an Other Blackstone Account or a co-investment vehicle, the Adviser, Blackstone or its affiliates, or the
Company, will, in certain circumstances, advance such fees and expenses without charging interest until paid by the Other Blackstone
Account or co-investment vehicle, as applicable.
Further conflicts could arise once we and Blackstone or its affiliates have made our respective investments. For example, if we enter into a
joint venture with an Other Blackstone Account, our interests and the interests of such Other Blackstone Account may conflict, for example
when one joint venture partner seeks to sell the property in the joint venture but the other joint venture partner does not. In such situations,
the ability of the Adviser to recommend actions in our best interests might be impaired.
Related Party Transaction Policies
Our Board of Directors recognizes the fact that transactions with related persons may present risks of conflicts or the appearance of
conflicts of interest. Our Board of Directors has adopted a written policy on transactions with related persons. Under the policy, a committee
of our Board of Directors composed solely of independent directors who are disinterested or the disinterested members of our Board of
Directors must review and approve any “related person transaction” (defined as any transaction that would be required to be disclosed by
us under Item 404(a) of Regulation S-K in which we were or are to be a participant, other than an employment relationship or transaction
involving an executive officer and any related compensation, and the amount involved exceeds $120,000 and in which any “related
person” (as defined as in paragraph (a) of Item 404 of Regulation S-K) had or will have a direct or indirect material interest) and all material
facts with respect thereto. No related person transaction will be executed without the approval or ratification of a committee of our Board of
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Directors composed solely of independent directors who are disinterested or by the disinterested members of our Board of Directors. The
Affiliate Transaction Committee fulfills the obligations under this policy.
In reviewing a related person transaction or proposed related person transaction, the Affiliate Transaction Committee or disinterested
directors, as applicable, shall consider all relevant facts and circumstances, including without limitation:
■
the nature of the related person’s interest in the transaction;
■
the material terms of the transaction;
■
the importance of the transaction both to the Company and the related person;
■
whether the transaction would likely impair the judgment of a director or executive officer to act in the best interest of the Company;
■
whether the value and the terms of the transaction are substantially similar as compared to those of similar transactions previously
entered into by the Company with non-related persons, if any; and
■
any other matters that management or the Affiliate Transaction Committee or disinterested directors, as applicable deem appropriate.
In addition, the policy provides that the Affiliate Transaction Committee, in connection with any approval or ratification of a related person
transaction involving a non-employee director or director nominee, considers whether such transaction would compromise the director or
director nominee’s status as an “independent,” “outside,” or “non-employee” director, as applicable, under our charter and our Corporate
Governance Guidelines and our Code of Business Conduct and Ethics.
Report of the Affiliate Transaction Committee
The Affiliate Transaction Committee has examined the fairness of the transactions described above, and has determined that all such
transactions are fair and reasonable to us. The Affiliate Transaction Committee has reviewed our policies described above, in our 2023
Annual Report on Form 10-K (the “Annual Report”) and our registration statement related to our ongoing public offering, as well as other
policies previously reviewed and approved by our Board of Directors, and determined that they are in the best interests of our stockholders
because it believes such policies are consistent with achieving our investment objectives while appropriately addressing conflicts of interest
that may arise.
The Affiliate Transaction Committee of the Board of Directors:
Richard I. Gilchrist (Chairperson)
Raymond J. Beier
Susan Carras
Field Griffith
Edward Lewis
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Proposal 2 — Ratification of Appointment of Independent
Registered Public Accounting Firm
The Audit Committee has appointed the firm of Deloitte & Touche LLP (“Deloitte”) as our independent registered public accounting firm for
the year ending December 31, 2024 and has directed that the appointment of such independent registered public accounting firm be
submitted for ratification by our stockholders at the Annual Meeting. Deloitte also serves as the independent registered public accounting
firm of Blackstone.
We have been advised by Deloitte that neither that firm nor any of its associates has any relationship with us or our subsidiaries other than
the usual relationship that exists between an independent registered public accounting firm and its clients.
We expect that representatives of Deloitte will be present at the Annual Meeting, will have the opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions. If the appointment of Deloitte is not ratified, our Board of Directors will
reconsider the appointment.
Stockholder ratification of the appointment of Deloitte as our independent registered public accounting firm is not required by our charter or
otherwise. Even if the appointment is ratified, our Audit Committee, in its discretion, may direct the appointment of a different independent
registered public accounting firm at any time during the year if it determines that such a change would be in our best interests.
Audit and Non-Audit Fees
Aggregate fees that we were billed for the fiscal years ended December 31, 2023 and 2022 by our independent registered public accounting
firm, Deloitte, were as follows:
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Fiscal Year Ended
December 31, 2023
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Fiscal Year Ended
December 31, 2022
|
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Audit fees (a)
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$7,741,678
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$8,069,200
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Audit-related fees (b)
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290,000
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577,661
|
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Tax fees (c)
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1,557,954
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2,339,113
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All other fees
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—
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—
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Total
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$9,589,632
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$10,985,974
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(a)
Audit fees include amounts billed to us related to annual financial statement audit work, acquisition audit work, quarterly financial
statement reviews and review of SEC registration statements.
(b)
Audit-related fees include amounts billed to us for assurance and related services that traditionally are performed by independent
auditors that are reasonably related to the performance of the audit or review of the financial statements, such as due diligence related
to acquisition, attestation services that are not required by statute or regulation and consultation concerning financial accounting and
reporting standards.
(c)
Tax fees include amounts billed to us for professional services performed by professional staff in our independent registered public
accounting firm’s tax division, except those services related to the audit of our financial statements. These include fees for tax due
diligence, tax compliance, tax planning and advice, including federal, state and local tax issues. Services may also include assistance
with tax audits and appeals before the U.S. Internal Revenue Service and similar state and local taxing authorities, as well as federal,
state and local tax issues related to REIT due diligence of property acquisitions.
The Audit Committee of our Board of Directors was advised that there were no services provided by Deloitte that were unrelated to the audit
of the annual fiscal year-end financial statements and the review of interim financial statements that could impair Deloitte from maintaining
its independence as our independent auditor and concluded that it was independent.
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Audit Committee Pre-Approval Policies and Procedures
In accordance with our Audit Committee pre-approval policy, all audit and non-audit services performed for us by our independent registered
public accounting firm were pre-approved by the Audit Committee of our Board of Directors, which concluded that the provision of such
services by Deloitte was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions.
Unless a type of service to be provided by the independent certified public accountants has received “general” pre-approval, it will require
“specific” pre-approval by the Audit Committee. Additionally, any proposed services exceeding “general” pre-approved cost levels will
require specific pre-approval by the Audit Committee. The term of any general pre-approval will apply until the next pre-approval made by
the Audit Committee. The Audit Committee will review, and may revise, the general pre-approval policy and the services that may be
provided by the independent certified public accountants from time to time.The Audit Committee does not delegate its responsibility to pre-
approve services performed by the independent certified public accountants to management.
All requests or applications for services to be provided by the independent auditor that do not require specific pre-approval by the Audit
Committee will be submitted to management and must include a detailed description of the services to be rendered. Management will
determine whether such services are included within the list of services that have received the general pre-approval of the Audit Committee.
The Audit Committee will be informed on a timely basis of any such services rendered by the independent auditor.
Requests or applications for services that require specific separate approval by the Audit Committee are required to be submitted to the
Audit Committee by both the independent auditor and the Chief Financial Officer. The Chairperson of the Audit Committee has been
delegated the authority to specifically pre-approve all services not covered by the general pre-approval guidelines, up to a certain amount.
All amounts specifically pre-approved by the Chairperson of the Audit Committee in accordance with the pre-approval policy are to be
disclosed to the Audit Committee at the next regularly scheduled meeting.
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Blackstone Real Estate Income Trust
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VOTING RECOMMENDATION
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE RATIFICATION OF
DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING
DECEMBER 31, 2024
General Information About the Annual Meeting
and Voting
This Proxy Statement is being furnished by and on behalf of the
Board of Directors of Blackstone Real Estate Income Trust, Inc., a
Maryland corporation, in connection with the solicitation of proxies
to be voted at the Annual Meeting. This Proxy Statement and the
enclosed proxy card and our Annual Report will be first mailed on
or about April 22, 2024 to stockholders of record as of the close of
business on April 12, 2024 (the “Record Date”).
In this section of the Proxy Statement, we answer some common
questions regarding our 2024 Annual Meeting and the voting of
shares at the meeting.
When will the Annual Meeting be held?
The Annual Meeting will be held as a “virtual meeting” via live
webcast on July 11, 2024 at 8:00 a.m., Eastern Time.
How do I attend and vote my shares at
the virtual Annual Meeting?
This year’s Annual Meeting will be a completely “virtual” meeting
of stockholders. You may attend the Annual Meeting live via the
Internet at
www.virtualshareholdermeeting.com/BREIT2024
. If
you virtually attend the Annual Meeting, you can vote your shares
electronically and submit your questions during the Annual
Meeting by visiting
www.virtualshareholdermeeting.com/
BREIT2024
. A summary of the information you need to attend the
Annual Meeting and vote via the Internet is provided below:
■
instructions on how to attend and participate via the Internet,
including how to demonstrate proof of stock ownership, are
posted at
www.virtualshareholdermeeting.com/BREIT2024
;
■
assistance with questions regarding how to attend and
participate via the Internet will be provided at
www.virtualshareholdermeeting.com/BREIT2024
on the day
of the Annual Meeting;
■
stockholders may vote and submit questions while attending
the Annual Meeting via the Internet; and
■
you will need your 16-digit control number that is included in
your proxy card or the instructions that accompanied your
proxy materials in order to enter the Annual Meeting and to
vote during the Annual Meeting.
Will I be able to participate in the online
Annual Meeting on the same basis I
would be able to participate in a live
Annual Meeting?
The Annual Meeting will be held in a virtual meeting format only
and will be conducted via live audio webcast. The online meeting
format for the Annual Meeting will enable full and equal
participation by all our stockholders from any place in the world at
little to no cost.
We designed the format of the online Annual Meeting to ensure
that our stockholders who attend our Annual Meeting will be
afforded similar rights and opportunities to participate as they
would have at an in-person meeting and to enhance stockholder
access, participation and communication through online tools. We
will take the following steps to ensure such an experience:
■
providing stockholders with the ability to submit appropriate
questions real-time via the meeting website, limiting questions
to one per stockholder unless time otherwise permits; and
■
answering as many questions submitted in accordance with the
meeting rules of conduct as possible in the time allotted for the
meeting without discrimination.
What is this document and why have I
received it?
This Proxy Statement and the enclosed proxy card are being
furnished to you, as a stockholder of Blackstone Real Estate
Income Trust, Inc., because our Board of Directors is soliciting
your proxy to vote at the Annual Meeting. This Proxy Statement
contains information that stockholders should consider before
voting on the proposals to be presented at the meeting.
What am I voting on?
There are two proposals scheduled to be considered and voted on
at the Annual Meeting:
■
Proposal 1: Election of nine director nominees listed herein;
and
■
Proposal 2: Ratification of the appointment of Deloitte &
Touche LLP as our independent registered public accounting
firm for the year ending December 31, 2024.
What is the required vote for approval
of each proposal?
Proposal 1: Election of nine director nominees listed herein. The
affirmative vote of a majority of the shares entitled to vote that are
present online or by proxy at the Annual Meeting is required for
the election of each nominee for director. Abstentions and broker
non-votes will have the effect of a vote against the nominees. A
“broker non-vote” occurs when a broker does not vote on a matter
on the proxy card because the broker does not have discretionary
voting power for that particular matter and has not received voting
instructions from the beneficial owner.
Proposal 2: Ratification of the appointment of Deloitte as our
independent registered public accounting firm for the year ending
December 31, 2024. A majority of the votes cast at the Annual
Meeting online or by proxy is required to approve the auditor
ratification proposal. Abstentions, if any, will not affect the
outcome of this proposal. Your shares may be voted on for this
proposal if they are held in the name of a brokerage firm even if
you do not provide the brokerage firm with voting instructions.
How does the Board of Directors
recommend that I vote?
Our Board of Directors recommends that you vote your shares as
follows:
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■
FOR the election of each of the nine director nominees listed
herein; and
■
FOR the ratification of the appointment of Deloitte & Touche
LLP as our independent registered public accounting firm for
the year ending December 31, 2024.
Who can vote?
Holders of record of our shares of common stock as of the close
of business on the Record Date will be entitled to vote at the
Annual Meeting. As of the Record Date, there were 1,441,337,712
Class S shares, 2,320,676,056 Class I shares, 55,172,963 Class
T shares, 151,641,542 Class D shares and 2,245,587 Class C
shares of common stock issued and outstanding for a total of
3,971,073,860 shares of our common stock issued and
outstanding. You are entitled to one vote for each share you held
as of the Record Date.
How do I vote if I am a registered
stockholder?
If you are a registered stockholder (that is, if your shares are
registered on our records in your name and not in the name of
your broker or nominee), you may authorize a proxy to vote your
shares in any of the following ways described below:
■
via the Internet by going to
www.proxyvote.com/BREIT
and
following the on-screen directions. Please have your proxy
card in hand when accessing the website, as it contains a 16-
digit control number required to record your voting instructions
via the Internet;
■
by phone by calling the number listed on the proxy card,
(800) 690-6903, and following the recorded instructions, or by
dialing (844) 618-1695 and speaking to a live agent. You will
need the 16-digit control number included on your proxy card
in order to record your voting instructions by telephone; or
■
by mail by marking, signing, dating and returning the enclosed
proxy card.
If you authorize a proxy by telephone or Internet, you do not need
to mail your proxy card. See the attached proxy card for more
instructions on how to vote your shares.
If you elect to participate in the Annual Meeting via live webcast,
as described above under “When will the Annual Meeting be
held?”, you can vote online during the Annual Meeting prior to the
closing of the polls, and any previous votes that you submitted,
whether by Internet, telephone or mail, will be superseded.
All proxies that are properly executed and received by our
Secretary prior to the Annual Meeting, and are not revoked, will be
voted at the Annual Meeting. Even if you plan to participate in the
Annual Meeting, we urge you to return your proxy card or submit a
proxy by telephone or via the Internet to assure the representation
of your shares at the Annual Meeting.
How do I vote if I hold my shares in a
custodial account?
If your shares of our common stock are held in a custodial
account by your broker or other nominee, only your broker or
other nominee can vote your shares of our common stock at the
Annual Meeting and your vote cannot be cast unless you provide
instructions to your broker or other nominee on how to vote or
obtain a legal proxy from your broker or other nominee, submit it
in advance to our proxy solicitor, and vote at the virtual meeting.
You should follow the directions provided by your broker or other
nominee regarding how to instruct your broker or other nominee to
vote your shares of our common stock.
How can I authorize a proxy to vote over
the Internet or by telephone?
To authorize a proxy to vote electronically via the Internet, go to
www.proxyvote.com/BREIT
and follow the instructions. Please
have your proxy card in hand when accessing the website, as it
contains a 16-digit control number required to record your voting
instructions via the Internet.
If you have access to a touch-tone telephone, you may authorize
your proxy by dialing (800) 690-6903 and following the recorded
instructions, or by dialing (844) 618-1695 and speaking to a live
agent. You will need the 16-digit control number included on your
proxy card in order to record your voting instructions by
telephone.
You can authorize a proxy to vote via the Internet or by telephone
at any time prior to 11:59 p.m., Eastern Time, July 10, 2024, the
day before the Annual Meeting.
What if I return my proxy but do not mark
it to show how I am voting?
If you submit a signed proxy without indicating your vote on any
matter, the designated proxies will vote to elect all nine director
nominees as directors and to approve the ratification of the
appointment of Deloitte as our independent registered public
accounting firm for the year ending December 31, 2024 and will
vote in their discretion for any other matters properly presented
for consideration at the Annual Meeting.
What if other matters come up at the
Annual Meeting?
At the date this Proxy Statement went to press, we did not know
of any matters to be properly presented at the Annual Meeting
other than those referred to in this Proxy Statement. If other
matters are properly presented for consideration at the meeting or
any adjournment or postponement thereof and you are a
stockholder of record and have submitted a proxy card, the
persons named in your proxy card will have the discretion to vote
on those matters for you.
Can I change my vote or revoke my
proxy after I authorize my proxy?
Yes. At any time before the vote on a proposal, you can change
your vote either by:
■
executing or authorizing, dating and delivering to us a new proxy
with a later date that is received no later than 11:59 p.m., Eastern
Time, on July 10, 2024;
■
authorizing a proxy again via the Internet or by telephone at a
later time before the closing of those voting facilities at 11:59
p.m., Eastern Time, on July 10, 2024;
■
sending a written statement revoking your proxy card to our
Secretary or any corporate officer of the Company, provided
such statement is received no later than 11:59 p.m., Eastern
Time, on July 10, 2024; or
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Blackstone Real Estate Income Trust
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■
participating in the Annual Meeting and voting online during the
Annual Meeting prior to the closing of the polls.
Your participation at the Annual Meeting will not, by itself, revoke
a proxy previously authorized by you. We will honor the proxy
card or authorization with the latest date.
Proxy revocation notices should be sent to Blackstone Real
Estate Income Trust, Inc., 345 Park Avenue, New York, New York
10154, Attention: Secretary. New paper proxy cards should be
sent to Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
What constitutes a quorum?
We will convene the Annual Meeting if stockholders representing
the required quorum of shares of our common stock entitled to
vote either sign and return their paper proxy cards, authorize a
proxy to vote electronically or telephonically or participate at the
meeting. The presence, either online or by proxy, at the Annual
Meeting of at least 50% of all the votes entitled to be cast on any
matter will constitute a quorum. Under our bylaws, if a quorum is
not present at the Annual Meeting, the Chairperson of the Annual
Meeting may adjourn the Annual Meeting to a date not more than
120 days from the original Record Date for the Annual Meeting
without notice other than an announcement at the Annual
Meeting. If you sign and return your paper proxy card or authorize
a proxy to vote electronically or telephonically, your shares will be
counted to determine whether we have a quorum even if you
abstain or fail to vote as indicated in the proxy materials. Broker
non-votes and abstentions will also be considered present for the
purpose of determining whether we have
a quorum.
Who will count the votes?
Representatives of Broadridge (our solicitor) or its designee will
count the votes and will serve as the independent inspector of
election.
Where can I find the voting results of the
Annual Meeting?
We intend to announce the voting results at the Annual Meeting
and in a Current Report on Form 8-K filed with the SEC within four
business days after the date of the Annual Meeting.
How can I get additional copies of this
Proxy Statement or other information
filed with the SEC relating to this
solicitation?
You may obtain additional copies of this Proxy Statement or other
information filed with the SEC relating to this solicitation by calling
our solicitor, Broadridge, toll-free at (844) 618-1695.
Where can I get more information about
Blackstone Real Estate Income Trust?
In connection with this solicitation, we have provided you with our
Annual Report that contains our audited financial statements. We
also file reports and other documents with the SEC. You can view
these documents at the SEC’s website,
www.sec.gov
. You can
also find more information on our website,
www.breit.com
.
How is this solicitation being made?
This solicitation is being made primarily by the mailing of these
proxy materials. Supplemental solicitations may be made by mail
or telephone by our officers and representatives, who will receive
no extra compensation for their services. The expenses in
connection with this solicitation, including preparing and mailing
these proxy materials, will be borne by us. We will reimburse
brokerage firms and others for their reasonable expenses in
forwarding solicitation material to the beneficial owners of our
common stock. We have hired Broadridge to assist us in the
distribution of our proxy materials and for the solicitation of proxy
votes. We will pay Broadridge customary fees and expenses for
these services of approximately $125,000.
Upon request, we will also reimburse brokerage houses and other
custodians, nominees and fiduciaries for forwarding proxy and
solicitation materials to stockholders.
Will my vote make a difference?
Yes, your vote is VERY IMPORTANT. Your immediate response
will help avoid potential delays and may save us significant
additional expenses associated with soliciting stockholder votes.
We encourage you to participate in the governance of our
company.
Donation to the Navy SEAL Foundation
To recognize your participation, the Company will make a
charitable donation to The Navy SEAL Foundation on behalf of
every stockholder that votes. The Navy SEAL Foundation is a
non-profit organization that provides support and assistance to the
Naval Special Warfare community and its families. The Navy
SEAL Foundation provides a comprehensive set of programs
specifically designed to improve health and welfare, build and
enhance resiliency, empower and educate families and provide
critical support during times of illness, injury, loss and transition.
Stephen A. Schwarzman, the Chairman, Chief Executive Officer
and co-founder of Blackstone, has served on the Navy SEAL
Foundation’s honorary board since March 2017.
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2024 Proxy Statement
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Audit Committee Report
Our Board of Directors’ Audit Committee carries out oversight functions with respect to the preparation, review and audit of our financial
statements, our system of internal controls and the qualifications, independence and performance of our internal auditor consultants and
independent auditors, and operates under a written charter adopted by the Board of Directors. The charter can be viewed, together with any
future changes that may occur, on our website at
www.breit.com
. The Audit Committee has the sole authority and responsibility to select,
evaluate and, as appropriate, replace our independent auditors. The Audit Committee members are “independent,” consistent with the
qualifications set forth in our charter, the listing standards of the NYSE and Rule 10A-3 under the Exchange Act applicable to board of
directors in general and audit committees in particular.
Our management is responsible for the development, maintenance and evaluation of internal controls and procedures and our financial
reporting system, the maintenance of appropriate accounting and financial reporting principles or policies and the preparation, presentation
and integrity of our financial statements. Our independent registered public accounting firm is responsible for auditing our consolidated
financial statements in accordance with U.S. generally accepted auditing standards and expressing an opinion as to their conformity with
U.S. generally accepted accounting principles. The Audit Committee’s responsibility is to monitor and oversee the foregoing functions.
The Audit Committee reviews our financial reporting process on behalf of the Board of Directors. In performance of its oversight function,
the Audit Committee has met and held discussions with management and our independent registered public accounting firm with respect to
our audited consolidated financial statements for fiscal year 2023 and related matters. Management advised the Audit Committee that our
consolidated financial statements were prepared in accordance with generally accepted accounting principles and the Committee has
reviewed and discussed the consolidated financial statements with management and our independent auditors, Deloitte & Touche LLP. Our
independent auditors presented to and reviewed with the Audit Committee the matters required to be discussed by the applicable
requirements of the Public Company Accounting Oversight Board and the SEC. Our independent auditors also provided to the Committee
the written disclosures and the letter from the auditors required by applicable requirements of the Public Company Accounting Oversight
Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and in connection
therewith, the Committee discussed with the independent auditors their views as to their independence. The Audit Committee also
reviewed, among other things, the audit and non-audit services performed by, and the amount of fees paid for such services to, Deloitte &
Touche LLP. The Audit Committee meetings regularly include executive sessions with our independent registered public accounting firm
without the presence of our management.
In undertaking its oversight function, the Audit Committee relied, without independent verification, on management’s representation that the
financial statements have been prepared with integrity and objectivity and in conformity with accounting principles generally accepted in the
United States and on the representations of the independent auditors included in their report on our financial statements. The Audit
Committee is not, however, professionally engaged in the practice of accounting or auditing and does not provide any expert or other
special assurance or professional opinion as to the sufficiency of the external audits, whether the Company’s financial statements are
complete and accurate and are in accordance with generally accepted accounting principles, or on the effectiveness of the system of
internal control.
Based on the Audit Committee’s considerations, discussions with management and discussion with the independent auditors as described
above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in our
Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC.
Submitted by the Audit Committee of the Company’s Board of Directors:
Raymond Beier (Chairperson)
Richard Gilchrist
Susan Carras
Edward Lewis
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Blackstone Real Estate Income Trust
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Annual Report
Our Annual Report is being concurrently made available for distribution to our stockholders.
We make available, free of charge on our website, all of our filings that are made electronically with the SEC, including Forms 10-K, 10-Q
and 8-K. These filings are available on our website,
www.breit.com
. Copies of our Annual Report on Form 10-K including financial
statements and schedules thereto, filed with the SEC, are also available without charge to stockholders upon written request addressed to
Secretary, Blackstone Real Estate Income Trust, Inc., 345 Park Avenue, New York, New York 10154.
Other Matters
Our management does not know of any other matters to come before the Annual Meeting. If, however, any other matters do come before
the Annual Meeting, it is the intention of the persons designated as proxies to vote in accordance with their discretion on such matters.
Stockholder Proposals for the 2025 Annual Meeting
If you wish to submit a stockholder proposal pursuant to Rule 14a-8 under the Exchange Act for inclusion in our Proxy Statement and proxy
card for our 2025 Annual Meeting of Stockholders, your proposal must be received by our Secretary on or before December 23, 2024. Your
proposal should be mailed by certified mail return receipt requested to our Secretary at Blackstone Real Estate Income Trust, Inc., 345 Park
Avenue, New York, New York 10154. Failure to deliver a proposal in accordance with this procedure may result in it not being deemed
timely received. In addition, if you desire to bring business (including director nominations) before our 2025 Annual Meeting, you must
comply with our bylaws, which currently require that you provide written notice of such business to our Secretary no earlier than November
23, 2024 and no later than 5:00 p.m. New York City Time, on December 23, 2024. However, if the 2025 Annual Meeting is advanced or
delayed more than 30 days from the first anniversary of the date of the 2024 Annual Meeting, notice by the stockholder to be timely must be
so delivered not earlier than the 150th day prior to the date of such annual meeting and not later than 5:00 p.m., New York City time, on the
later of the 120th day prior to the date of such annual meeting, as originally convened, or the tenth day following the day on which public
announcement of the date of such meeting is first made. For additional requirements, stockholders should refer to our bylaws, Article II,
Section 11(a), “Advance Notice of Stockholder Nominees for Director and Other Stockholder Proposals,” a current copy of which may be
obtained from our Secretary.
In addition to satisfying the foregoing requirements under our bylaws, to comply with the universal proxy rules, stockholders who intend to
solicit proxies in support of director nominees other than our nominees must provide notice that sets forth the information required by Rule
14a-19 under the Exchange Act no later than May 12, 2025.
Householding of Proxy Materials
SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements with respect to two or
more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which
is commonly referred to as “householding,” provides cost savings for companies. Under this procedure, stockholders of record who have the
same address and last name will receive only one copy of our Proxy Statement unless one or more of these stockholders notifies us that
they wish to continue receiving individual copies. This procedure reduces printing costs and postage fees. Stockholders will continue to
receive separate proxy cards. If you participate in householding and wish to receive a separate copy of this Proxy Statement, or if you do
not wish to participate in householding and prefer to receive separate copies of our Proxy Statement in the future, please contact
Broadridge Financial Solutions, Inc., Householding Department in writing at 51 Mercedes Way, Edgewood, New York 11717; or by
telephone: (800) 542-1061.You can also request prompt delivery of a copy of the Proxy Statement and Annual Report by contacting
Broadridge, 51 Mercedes Way, Edgewood, New York 11717, (844) 618-1695.
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TABLE OF CONTENTS
Proposal 1 Election of Directors ...............................................................................................................................Nominees for Election as Directors ................................................................................................................................The Board of Directors and Committees .......................................................................................................................Corporate Governance ......................................................................................................................................................Executive and Senior Officers .........................................................................................................................................Compensation of Directors and Executive Officers ................................................................................................Executive Officer Compensation .....................................................................................................................................Non-Employee Director Compensation .........................................................................................................................Equity Compensation Plan Information .........................................................................................................................Security Ownership of Certain Beneficial Owners and Management ....................................................................Transactions with Related Persons and Certain Control Persons ....................................................................Our Relationship with Our Adviser and Blackstone ....................................................................................................Indemnification Agreements with Directors and Officers ..........................................................................................Conflicts of Interest with the Adviser and its Affiliates ...............................................................................................Related Party Transaction Policies .................................................................................................................................Report of the Affiliate Transaction Committee .............................................................................................................Proposal 2 Ratification of Appointment of Independent Registered Public Accounting Firm ...........Audit and Non-Audit Fees .................................................................................................................................................Audit Committee Pre-Approval Policies and Procedures ........................................................................................General Information About The Annual Meeting and Voting ...............................................................................Audit Committee Report ....................................................................................................................................................Annual Report ......................................................................................................................................................................Other Matters .......................................................................................................................................................................Stockholder Proposals for the 2025 Annual Meeting .................................................................................................Householding of Proxy Materials ....................................................................................................................................