Blackstone Real Estate Credit Fund Posts $12.8M Net Asset Gain

TL;DR

**BREC is off to a solid start with strong investment income and asset growth, making it a compelling play in private real estate credit.**

AI Summary

Blackstone Private Real Estate Credit & Income Fund (BREC) reported a net increase in net assets from operations of $12.825 million for the three months ended September 30, 2025, and $15.599 million since its commencement of operations on May 1, 2025. Total investment income reached $14.196 million for the quarter, with net investment income after tax expense at $8.692 million. The fund experienced a net unrealized gain of $3.440 million on non-controlled/non-affiliated investments during the quarter, contributing to a total net realized and unrealized gain of $4.133 million. Total assets stood at $821.609 million as of September 30, 2025, with investments at fair value totaling $793.353 million. Secured debt, net, was $383.148 million, and total net assets were $403.534 million, resulting in a Net Asset Value (NAV) per share of $25.77. The fund's investment portfolio is heavily weighted towards senior loans ($368.283 million) and CMBS ($230.352 million).

Why It Matters

For investors, BREC's performance indicates a positive start since its May 2025 inception, with a healthy NAV per share of $25.77 and significant investment income. The fund's substantial allocation to senior loans and CMBS suggests a focus on income-generating real estate credit, which could appeal to income-focused investors. However, the competitive landscape for real estate credit remains intense, and BREC's ability to maintain its yield and asset quality will be crucial. Employees benefit from the fund's growth, signaling stability and potential for continued operations, while customers (borrowers) gain access to capital for real estate projects. The broader market sees BREC as a significant player in the private real estate credit space, influencing market liquidity and pricing for real estate debt.

Risk Assessment

Risk Level: medium — The fund's risk level is medium due to its significant exposure to real estate credit, which can be sensitive to interest rate fluctuations and economic downturns, as highlighted by the 'changes in political, economic or real estate market conditions, the inflation and interest rate environment' risk factor. Additionally, the valuation of its investments, 'particularly those having no liquid trading market,' introduces inherent valuation risk, as noted in the forward-looking statements.

Analyst Insight

Investors should consider BREC for exposure to private real estate credit, given its positive initial performance and focus on income-generating assets. However, they should monitor interest rate trends and real estate market conditions closely, as these factors could impact the fund's future returns and asset valuations.

Financial Highlights

debt To Equity

0.95

revenue

$14.196M

operating Margin

N/A

total Assets

$821.609M

total Debt

$383.148M

net Income

$8.692M

eps

$25.77

gross Margin

N/A

cash Position

$20.949M

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• $12.825M — Net increase in net assets from operations (For the three months ended September 30, 2025, indicating strong operational performance.)
• $14.196M — Total investment income (For the three months ended September 30, 2025, demonstrating significant revenue generation from investments.)
• $8.692M — Net investment income after tax expense (For the three months ended September 30, 2025, showing profitability after expenses and taxes.)
• $3.440M — Net unrealized gain on investments (For the three months ended September 30, 2025, reflecting positive fair value adjustments to the investment portfolio.)
• $793.353M — Total investments at fair value (As of September 30, 2025, representing the bulk of the fund's assets.)
• $403.534M — Total net assets (As of September 30, 2025, indicating the fund's equity value.)
• $25.77 — Net asset value per share (As of September 30, 2025, a key metric for shareholder value.)
• $383.148M — Secured debt, net (As of September 30, 2025, highlighting the fund's leverage.)
• 15,660,394 — Common Shares outstanding (As of September 30, 2025, used to calculate NAV per share.)
• $395.503M — Proceeds from issuance of common shares (Since commencement of operations to September 30, 2025, indicating successful capital raising.)

Key Players & Entities

• Blackstone Private Real Estate Credit & Income Fund (company) — Registrant
• Blackstone Real Estate Special Situations Advisors L.L.C. (company) — Adviser
• SEC (regulator) — Securities and Exchange Commission
• $12.825 million (dollar_amount) — Net increase in net assets from operations for three months ended September 30, 2025
• $14.196 million (dollar_amount) — Total investment income for three months ended September 30, 2025
• $8.692 million (dollar_amount) — Net investment income after tax expense for three months ended September 30, 2025
• $793.353 million (dollar_amount) — Total investments at fair value as of September 30, 2025
• $403.534 million (dollar_amount) — Total net assets as of September 30, 2025
• $25.77 (dollar_amount) — Net asset value per share as of September 30, 2025
• September 30, 2025 (date) — End of quarterly period

FAQ

Risk Factors

• Leverage Risk [high — financial]: The fund utilizes secured debt, net of $383.148 million, representing a significant portion of its capital structure. High leverage can amplify both gains and losses, increasing volatility and the risk of default if investment income falters.
• Interest Rate Sensitivity [medium — market]: As a credit-focused fund, BREC's portfolio, particularly senior loans and CMBS, is sensitive to interest rate fluctuations. Changes in interest rates can impact the fair value of investments and the income generated.
• Real Estate Market Volatility [medium — market]: Investments in real estate credit and CMBS are subject to the inherent risks and cyclical nature of the real estate market. Economic downturns or sector-specific issues can negatively affect property values and loan performance.
• External Management Risk [medium — operational]: The fund is externally managed by Blackstone Real Estate Special Situations Advisors L.L.C. The performance and strategic decisions of the Adviser directly impact the fund's results, and any changes in management or strategy could affect shareholder value.
• BDC Regulation [low — regulatory]: As a Business Development Company (BDC), BREC is subject to specific regulations under the Investment Company Act of 1940. Compliance with these regulations, including asset coverage requirements, is crucial and can impact operational flexibility.

Industry Context

The real estate credit market, where BREC operates, is characterized by a diverse range of investment opportunities from senior loans to more complex structured products like CMBS and CLOs. The industry is influenced by broader economic conditions, interest rate policies, and real estate market fundamentals. Competition exists from other BDCs, private credit funds, and traditional asset managers seeking yield in a fluctuating rate environment.

Regulatory Implications

As a BDC, BREC must adhere to the Investment Company Act of 1940, which imposes regulations on asset coverage, leverage, and investment strategies. Compliance is critical to maintain its BDC status and avoid potential penalties or restrictions that could impact operations and investor returns.

What Investors Should Do

1. Monitor leverage levels
2. Analyze investment income trends
3. Evaluate unrealized gains

Key Dates

• 2025-05-01: Commencement of Operations — Marks the beginning of the fund's investment activities and reporting period.
• 2025-09-30: Quarter End and Reporting Date — Date as of which the consolidated financial statements are presented, providing a snapshot of the fund's financial condition.

Glossary

CMBS

Commercial Mortgage-Backed Securities. These are debt securities backed by mortgages on commercial properties. (A significant portion of BREC's investment portfolio, indicating exposure to the commercial real estate debt market.)

BDC

Business Development Company. A type of closed-end investment company that invests in small and medium-sized U.S. businesses. (BREC is regulated as a BDC, meaning it is subject to specific rules regarding its investments and operations.)

NAV per share

Net Asset Value per share. Calculated by dividing the total net assets of a fund by the number of outstanding shares. (A key metric for investors to assess the per-share value of their investment in BREC.)

Unrealized gain

An increase in the value of an asset that has not yet been sold. (Contributes to the fund's overall increase in net assets, reflecting positive market movements in its investments.)

Secured debt, net

Debt that is backed by specific collateral, reducing the lender's risk. (Indicates the level of leverage employed by the fund, which can amplify returns but also increase risk.)

Year-Over-Year Comparison

As this is the first reported period since commencement of operations on May 1, 2025, there are no prior period filings to compare against. Key metrics such as net increase in net assets ($12.825M), total investment income ($14.196M), and net investment income ($8.692M) reflect the fund's initial performance. The fund's total assets stand at $821.609M with net assets of $403.534M, and a NAV per share of $25.77.

Key Financial Figures

• $0.01 — beneficial interest ("Common Shares"), $0.01 par value per share, outstanding as of

Filing Documents

• brec-20250930.htm (10-Q) — 1757KB
• brec-09302025xexx101.htm (EX-10.1) — 1246KB
• brec-09302025xexx102.htm (EX-10.2) — 82KB
• brec-09302025xexx311.htm (EX-31.1) — 10KB
• brec-09302025xexx312.htm (EX-31.2) — 10KB
• brec-09302025xexx321.htm (EX-32.1) — 5KB
• brec-09302025xexx322.htm (EX-32.2) — 5KB
• brec-20250930_g1.jpg (GRAPHIC) — 4KB
• brec-20250930_g2.jpg (GRAPHIC) — 35KB
• brec-20250930_g3.jpg (GRAPHIC) — 37KB
• orgcharta.jpg (GRAPHIC) — 58KB
• 0002049733-25-000049.txt ( ) — 10568KB
• brec-20250930.xsd (EX-101.SCH) — 46KB
• brec-20250930_cal.xml (EX-101.CAL) — 64KB
• brec-20250930_def.xml (EX-101.DEF) — 253KB
• brec-20250930_lab.xml (EX-101.LAB) — 532KB
• brec-20250930_pre.xml (EX-101.PRE) — 428KB
• brec-20250930_htm.xml (XML) — 1514KB

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 13 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 32 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 44 Item 4.

Controls and Procedures

Controls and Procedures 45 PART II OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 46 Item 1A.

Risk Factors

Risk Factors 46 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 46 Item 3. Defaults upon Senior Securities 46 Item 4. Mine Safety Disclosures 46 Item 5. Other Information 46 Item 6. Exhibits 47

Signatures

Signatures 48 2 Table of Contents CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This report contains forward-looking statements that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about Blackstone Private Real Estate Credit and Income Fund (together, with its consolidated subsidiaries, the "Company," "BREC," "we," "us" or "our"), our current and prospective portfolio investments, our industry, our beliefs and opinions, and our assumptions. Words such as "anticipates," "expects," "intends," "plans," "will," "may," "continue," "believes," "seeks," "estimates," "would," "could," "should," "targets," "projects," "outlook," "potential," "predicts" and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation: our future operating results; our business prospects and the performance of properties securing or underlying our investments; changes in political, economic or real estate market conditions, the inflation and interest rate environment or conditions affecting the financial and capital markets; our ability to raise sufficient capital and repurchase shares to execute our investment strategy; our contractual arrangements and relationships with third parties; our current and expected financings and investments; the adequacy of our cash resources, financing sources and working capital; the timing and amount of cash flow

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. Blackstone Private Real Estate Credit and Income Fund Consolidated Statement of Assets and Liabilities (in thousands, except share and per share amounts) (Unaudited) September 30, 2025 ASSETS Investments at fair value Non-controlled/non-affiliated investments (cost basis of $ 786,936 ) $ 793,353 Total investments at fair value (cost basis of $ 786,936 ) 793,353 Cash and cash equivalents 20,949 Restricted cash 1,735 Interest receivable from non-controlled/non-affiliated investments 4,503 Derivative assets at fair value 41 Other assets 1,028 Total assets $ 821,609 LIABILITIES Secured debt, net $ 383,148 Payables for investments purchased 24,470 Derivative liabilities at fair value 1,851 Distribution payable 2,673 Due to affiliates 1,182 Accrued expenses and other liabilities 4,751 Total liabilities 418,075 Commitments and contingencies (Note 10) NET ASSETS Common Shares, $ 0.01 par value ( 15,660,394 shares issued and outstanding) 157 Additional paid-in capital 395,346 Distributable earnings 8,031 Total net assets 403,534 Total liabilities and net assets $ 821,609 NET ASSET VALUE PER SHARE September 30, 2025 Net assets $ 403,534 Common Shares outstanding ($ 0.01 par value, unlimited shares authorized) 15,660,394 Net asset value per share $ 25.77 The accompanying notes are an integral part of these consolidated financial statements. 4 Table of Contents Blackstone Private Real Estate Credit and Income Fund Consolidated Statements of Operations (in thousands) (Unaudited) Three Months Ended September 30, 2025 For the period from May 1, 2025 (Commencement of operations) to September 30, 2025 Investment income: From non-controlled/non-affiliated investments: Interest income $ 14,196 $ 16,348 Total investment income 14,196 16,348 Expenses: Interest expense 5,121 5,629 Other general & administrative 1,404 3,467 Organizational costs 662 2,277 Amortization of continuous offering costs 19

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) (in thousands, except share amounts, per share data, percentages and as otherwise noted) 1. ORGANIZATION Blackstone Private Real Estate Credit and Income Fund ("BREC" or the "Company") is a Delaware statutory trust formed on October 14, 2024. The Company was formed to originate, acquire, finance and manage a portfolio consisting of a broad range of real estate-related investments in or relating to private and public debt, equity or other interests on a global basis, with a primary focus in the U.S. The Company may invest in, or originate, real estate-related debt and equity securities, including senior loans, mezzanine loans, subordinated debt, mortgage-backed securities ("MBS"), B-Notes, and collateralized loan obligations ("CLOs"). The Company is an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a business development company ("BDC") under the Investment Company Act of 1940, as amended (the "1940 Act"). The Company is externally managed by Blackstone Real Estate Special Situations Advisors L.L.C. (the "Adviser"), a subsidiary of Blackstone Inc. ("Blackstone"), and intends to elect to be treated for U.S. federal income tax purposes, and to qualify annually thereafter, as a regulate

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