Blackstone’s BXREX Program Completes First 1031 DST Offering

Blackstone Real Estate announced on September 21, 2026, the full subscription of its first Delaware Statutory Trust (DST) offering, a structure designed for commercial real estate owners seeking to reinvest sale proceeds into another “like-kind” property through a 1031 exchange and defer capital gains taxes in the process.

The portfolio for this initial offering is comprised of two Class A, highly amenitized multifamily properties in the Sunbelt totaling more than 600 units, according to Blackstone’s announcement. The assets were identified by Blackstone Real Estate Income Trust, Inc. (BREIT), which the announcement describes as owning an institutional-quality portfolio of more than $120 billion concentrated in data centers, industrial, and rental housing. The announcement did not disclose the dollar size of the completed offering or name the specific trust.

“We are thrilled to have fully subscribed our first DST offering and to help our investors achieve their 1031 goals. The Blackstone Real Estate Exchange program (“BXREX”) is backed by the full resources of Blackstone’s real estate platform, and we believe we are uniquely positioned for this space,” said Katie Keenan, Global Head of Blackstone’s Core+ Real Estate business and Chief Executive Officer of BREIT.

Offering Terms in SEC Filings

A Form D filed with the Securities and Exchange Commission on October 31, 2025, covers BXREX Portfolio I DST, a Delaware statutory trust formed in 2025 under the previous name BR-X Portfolio I DST. The filing lists Blackstone Real Estate Exchange LLC as sponsor, BXREX Portfolio I Manager LLC as trust manager, and BXREX Portfolio I Depositor LLC as parent depositor, each at 345 Park Avenue in New York. It describes a Rule 506(b) exempt equity offering in the residential industry group with a total offering amount of $175,555,053 and a minimum investment of $1,000,000. The filing reported no non-accredited investors and no sales, with the date of first sale yet to occur.

The filing names Blackstone Securities Partners L.P. (CRD 17917) as the recipient of sales compensation, soliciting in all states, with estimated sales commissions of $6,144,427 and an estimated $1,755,551 of gross proceeds to be used for fees and expenses, including a Facilitation Fee that may accrue to one or more related persons. It was signed by Leon Volchyok, Senior Managing Director.

A second Form D, filed May 11, 2026, covers BXREX Portfolio II DST, a trust formed in 2026 under the same sponsor, manager, and depositor structure and the same Rule 506(b) exemption, in the commercial industry group. That filing states a total offering amount of $187,308,863 and a minimum investment of $500,000, with estimated sales commissions of $6,555,810 and an estimated $1,873,089 for fees and expenses including a Facilitation Fee. It likewise reported no sales, with the first sale yet to occur, and was signed by Volchyok.

1031 and 721 Exchange Mechanics

As Blackstone describes the structure on the BXREX program page, a property owner sells a property and the proceeds go directly to a Qualified Intermediary, a specialized escrow agent. The investor identifies a “like-kind” replacement property within 45 days of the sale date and completes the acquisition within 180 days. Beneficial interests in a DST serve as the “like-kind” replacement property; a DST is a passive trust that owns institutional-quality, income-generating real estate, and investors generally receive income while invested, according to the firm.

After a holding period of at least two years, the REIT Operating Partnership has the option, but not the obligation, to purchase the DST properties through a 721 exchange under Section 721 of the Internal Revenue Code, delivering operating partnership units while investors maintain their tax-deferred basis. If the option is not exercised, the DST may sell its real estate and provide future 1031 exchange opportunities to its investors, the program materials state.

Blackstone states that property owners can face combined federal and state taxes exceeding 35% if they do not execute a 1031 exchange. The firm illustrates the point with a hypothetical unencumbered property purchased for $1 million and sold for $3 million, in which executing an exchange could allow the owner to retain over 50% more incremental net proceeds; the stated assumptions include $700,000 of depreciation, a 20% capital gains tax, a 3.8% net investment income tax, a 25% depreciation recapture tax, and a 13.3% California state tax rate.

BREIT disclosed the program’s launch in its second-quarter 2026 stockholder letter, dated July 23, 2026, stating that Blackstone and BREIT had recently launched BXREX as an opportunity to expand and diversify capital-raising strategies. The letter describes BXREX as allowing real estate owners to exchange eligible properties for institutional-quality real estate identified and managed by Blackstone Real Estate through a DST structure.

In the same letter, BREIT reported, as of June 30, 2026, $57 billion of net asset value, $104 billion of total asset value, 4,531 properties, 94% occupancy, a 44% leverage ratio, and 83% fixed-rate financing, with the portfolio approximately 90% concentrated in rental housing, industrial, and data centers and approximately 65% concentrated in Sunbelt markets. BREIT reported a 10.3% trailing twelve-month Class I net return and a 9.4% annualized Class I net return since its January 2017 inception, and said the second quarter of 2026 was its first quarter of positive net flows in nearly four years.

The program page cites a $618 billion global real estate portfolio value and 12,500 assets as of December 31, 2025, and a track record of more than 30 years. It describes Blackstone as the world’s largest owner of commercial real estate based on estimated market value per Real Capital Analytics as of March 31, 2026, and the world’s largest commercial real estate borrower per Green Street Advisors as of December 31, 2025.