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Advisory Agreement Among Blackstone Real Estate Income Trust, Inc., Breit Operating Partnership, L.p., And Bx Reit Advisors L.l.c. Table Of Contents

Consulting Services Agreement

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BLACKSTONE REAL ESTATE INCOME TRUST, INC. | Blackstone Real Estate Income Trust, Inc | BREIT Operating Partnership, LP | BX REIT Advisors LLC

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Title: ADVISORY AGREEMENT AMONG BLACKSTONE REAL ESTATE INCOME TRUST, INC., BREIT OPERATING PARTNERSHIP, L.P., AND BX REIT ADVISORS L.L.C. TABLE OF CONTENTS
Governing Law: New York     Date: 8/10/2016
Law Firm: Simpson Thacher    

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Exhibit 10.1

ADVISORY AGREEMENT

AMONG

BLACKSTONE REAL ESTATE INCOME TRUST, INC.,

BREIT OPERATING PARTNERSHIP, L.P.,

AND

BX REIT ADVISORS L.L.C.


TABLE OF CONTENTS

 

 

 

 

  

Page

 

1.

 

Definitions

  

 

1

  

2.

 

Appointment

  

 

5

  

3.

 

Duties of the Adviser

  

 

5

  

4.

 

Authority of Adviser

  

 

7

  

5.

 

Bank Accounts

  

 

8

  

6.

 

Records; Access

  

 

8

  

7.

 

Limitations on Activities

  

 

9

  

8.

 

Other Activities of the Adviser

  

 

9

  

9.

 

Relationship with Directors and Officers

  

 

11

  

10.

 

Management Fee

  

 

11

  

11.

 

Expenses

  

 

12

  

12.

 

Other Services

  

 

15

  

13.

 

Reimbursement to the Adviser

  

 

15

  

14.

 

No Joint Venture

  

 

16

  

15.

 

Term of Agreement

  

 

16

  

16.

 

Termination by the Parties

  

 

16

  

17.

 

Assignment to an Affiliate

  

 

16

  

18.

 

Payments to and Duties of Adviser Upon Termination

  

 

16

  

19.

 

Indemnification by the Company and the Operating Partnership

  

 

17

  

20.

 

Indemnification by Adviser

  

 

17

  

21.

 

Non-Solicitation

  

 

17

  

22.

 

Miscellaneous

  

 

17

  

23.

 

Initial Investment

  

 

19

  

 

i


ADVISORY AGREEMENT

THIS ADVISORY AGREEMENT (this “ Agreement ”), dated as of the             day of             , 2016 and effective as of the date the Registration Statement (as defined below) is declared effective by the Securities and Exchange Commission (the “ Effective Date ”), is by and among Blackstone Real Estate Income Trust, Inc., a Maryland corporation (the “ Company ”), BREIT Operating Partnership, L.P., a Delaware limited partnership (the “ Operating Partnership ”), and BX REIT Advisors L.L.C., a Delaware limited liability company (the “ Adviser ”). Capitalized terms used herein shall have the meanings ascribed to them in Section 1 below.

W I T N E S S E T H

WHEREAS, the Company intends to qualify as a REIT, and to invest its funds in investments permitted by the terms of Sections 856 through 860 of the Code;

WHEREAS, the Company is the general partner of the Operating Partnership and intends to conduct all of its business and make all or substantially all Investments through the Operating Partnership;

WHEREAS, the Company and the Operating Partnership desire to avail themselves of the knowledge, experience, sources of information, advice, assistance and certain facilities available to the Adviser and to have the Adviser undertake the duties and responsibilities hereinafter set forth, on behalf of, and subject to the supervision of, the Board, all as provided herein; and

WHEREAS, the Adviser is willing to undertake to render such services, subject to the supervision of the Board, on the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the parties agree as follows:

1. DEFINITIONS.  As used in this Agreement, the following terms have the definitions hereinafter indicated:

Acquisition Expenses ” shall have the meaning set forth in the Charter.

Adviser ” shall mean BX REIT Advisors L.L.C., a Delaware limited liability company.

Adviser Expenses ” shall have the meaning set forth in Section 12(b).

Affiliate ” shall have the meaning set forth in the Charter.

Average Invested Assets ” shall have the meaning set forth in the Charter.

Blackstone ” means, collectively, The Blackstone Group L.P., a Delaware limited partnership, and any Affiliate thereof.


Board ” shall mean the board of directors of the Company, as of any particular time.

Business Day ” shall have the meaning set forth in the Charter.

Bylaws ” shall mean the bylaws of the Company, as amended from time to time.

Cause ” shall mean, with respect to the termination of this Agreement, fraud, criminal conduct, willful misconduct or willful or negligent breach of fiduciary duty by the Adviser in connection with performing its duties hereunder.

CEA ” shall mean the U.S. Commodities Exchange Act, as amended.

Change of Control ” shall mean any event (including, without limitation, issue, transfer or other disposition of shares of capital stock of the Company or equity interests in the Operating Partnership, merger, share exchange or consolidation) after which any “person” (as that term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the “beneficial owner” (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended), directly or indirectly, of securities of the Company or the Operating Partnership representing greater than 50% or more of the combined voting power of Company’s or the Operating Partnership’s then outstanding securities, respectively; provided, that, a Change of Control shall not be deemed to occur as a result of any widely distributed public offering of the Shares.

Charter ” shall mean the Articles of Incorporation of the Company filed with the Maryland State Department of Assessments and Taxation in accordance with the Maryland General Corporation Law, as amended from time to time.

Class D Common Shares ” shall have the meaning set forth in the Charter.

Class I Common Shares ” shall have the meaning set forth in the Charter.

Class S Common Shares ” shall have the meaning set forth in the Charter.

Class T Common Shares ” shall have the meaning set forth in the Charter.

Class D NAV per Share ” shall have the meaning set forth in the Charter.

Class I NAV per Share ” shall have the meaning set forth in the Charter.

Class S NAV per Share ” shall have the meaning set forth in the Charter.

Class T NAV per Share ” shall have the meaning set forth in the Charter.

Code ” shall mean the Internal Revenue Code of 1986, as amended.

Commencement Date ” shall mean the date on which the Company breaks escrow for its initial Offering.

Company ” shall have the meaning set forth in the preamble of this Agreement.

Director ” shall mean a member of the Board.

Distributions ” shall have the meaning set forth in the Charter.

 

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Effective Date ” shall have the meaning set forth in the preamble of this Agreement.

Excess Amount ” shall have the meaning set forth in Section 14.

Exchange Act ” shall have the meaning set forth in the Charter.

Expense Year ” shall have the meaning set forth in Section 14.

GAAP ” shall mean generally accepted accounting principles as in effect in the United States of America from time to time.

Gross Proceeds ” shall mean the aggregate purchase price of all Shares sold for the account of the Company through an Offering, without deduction for Selling Commissions. The purchase price of any Class T Common Share or Class S Common Share shall be deemed to be the full, non-discounted offering price at the time of purchase of each such Class T Common Share or Class S Common Share.

Independent Appraiser shall have the meaning set forth in the Charter.

Independent Director ” shall have the meaning set forth in the Charter.

Initial Investment ” shall have the meaning set forth in Section 24.

Investment Company Act ” shall mean the Investment Company Act of 1940, as amended.

Investment Guidelines ” shall mean the investment guidelines adopted by the Board, as amended from time to time, pursuant to which the Adviser has discretion to acquire and dispose of Investments for the Company without the prior approval of the Board.

Investments ” shall mean any investments by the Company or the Operating Partnership, directly or indirectly, in Real Property, Real Estate-Related Assets or other assets.

Joint Ventures ” shall have the meaning set forth in the Charter.

Management Fee ” shall have the meaning set forth in Section 10(a).

Mortgage ” shall have the meaning set forth in the Charter.

NASAA REIT Guidelines ” shall have the meaning set forth in the Charter.

NAV ” shall mean the Company’s net asset value, calculated pursuant to the Valuation Guidelines.

Net Income ” shall have the meaning set forth in the Charter.

Offering ” shall have the meaning set forth in the Charter.

Operating Partnership ” shall have the meaning set forth in the preamble of this Agreement.

 

3


Operating Partnership Agreement ” shall mean the Limited Partnership Agreement of the Operating Partnership, as amended from time to time.

Organization and Offering Expenses ” shall have the meaning set forth in the Charter.

Other Blackstone Accounts ” shall mean investment funds, REITs, vehicles, accounts, products and/or other similar arrangements sponsored, advised and/or managed by Blackstone, 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 side-by-side or additional general partner investments with respect thereto).

Person ” shall mean an individual, corporation, business trust, estate, trust, partnership, joint venture, limited liability company or other legal entity.

Prospectus ” shall have the meaning set forth in the Charter.

Real Estate-Related Securities ” shall have the meaning set forth in the Charter.

Real Estate-Related Assets ” shall mean any investments by the Company or the Operating Partnership in Mortgages and Real Estate-Related Securities.

Real Property ” shall have the meaning set forth in the Charter.

Registration Statement ” shall mean the registration statement on Form S-11, as may be amended from time to time, of the Company filed with the Securities and Exchange Commission related to the registration of the Shares for the Company’s initial Offering.

REIT ” shall have the meaning set forth in the Charter.

Securities Act ” shall have the meaning set forth in the Charter.

Select Opportunistic Blackstone Accounts ” shall mean Other Blackstone Accounts that invest in “opportunistic” real estate and real estate-related assets globally that receive priority over the Company with respect to investments.

Selling Commissions ” shall have the meaning set forth in the Charter.

Shares ” shall have the meaning set forth in the Charter.

Stockholder Servicing Fee ” shall have the meaning set forth in the Charter.

Stockholders ” shall have the meaning set forth in the Charter.

Termination Date ” shall mean the date of termination of this Agreement or expiration of this Agreement in the event this Agreement is not renewed for an additional term.

Total Operating Expenses ” shall have the meaning set forth in the Charter.

 

4


Treasury Regulations ” shall mean the Procedures and Administration Regulation promulgated by the U.S. Department of Treasury under the Code, as amended.

2%/25% Guidelines ” shall have the meaning set forth in the Charter.

Valuation Guidelines ” shall mean the valuation guidelines adopted by the Board, as amended from time to time.

2. APPOINTMENT.  The Company and the Operating Partnership hereby appoint the Adviser to serve as their investment adviser on the terms and conditions set forth in this Agreement, and the Adviser hereby accepts such appointment. By accepting such appointment, the Adviser acknowledges that it has a contractual and fiduciary responsibility to the Company and the Stockholders. Except as otherwise provided in this Agreement, the Adviser hereby agrees to use its commercially reasonable efforts to perform the duties set forth herein, provided that the Company reimburses the Adviser for costs and expenses in accordance with Section 12 hereof.

3. DUTIES OF THE ADVISER.  Subject to the oversight of the Board and the terms and conditions of this Agreement (including the Investment Guidelines) and consistent with the provisions of the Company’s most recent Prospectus for the Shares, the Charter and Bylaws and the Operating Partnership Agreement, the Adviser will have plenary authority with respect to the management of the business and affairs of the Company and the Operating Partnership and will be responsible for implementing the investment strategy of the Company and the Operating Partnership. The Adviser will perform (or cause to be performed through one or more of its Affiliates or third parties) such services and activities relating to the selection of investments and rendering investment advice to the Company and the Operating Partnership as may be appropriate or otherwise mutually agreed from time to time, which may include, without limitation:

(a) serving as an advisor to the Company and the Operating Partnership with respect to the establishment and periodic review of the Investment Guidelines for the Company’s and the Operating Partnership’s investments, financing activities and operations;

(b) sourcing, evaluating and monitoring the Company’s and Operating Partnership’s investment opportunities and executing the acquisition, management, financing and disposition of the Company’s and Operating Partnership’s assets, in accordance with the Company’s Investment Guidelines, policies and objectives and limitations, subject to oversight by the Board;

(c) with respect to prospective acquisitions, purchases, sales, exchanges or other dispositions of Investments, conducting negotiations on the Company’s and 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;

(d) providing the Company with portfolio management and other related services;

(e) serving as the Company’s advisor with respect to decisions regarding any of the Company’s financings, hedging activities or borrowings undertaken by the Company, including

 

5


(1) assisting the Company in developing criteria for debt and equity financing that is specifically tailored to the Company’s investment objectives, and (2) advising the Company with respect to obtaining appropriate financing for the Investments (which, in accordance with applicable law and the terms and conditions of this Agreement and the Company’s Charter and Bylaws, may include financing by the Adviser or its Affiliates) and (3) negotiating and entering into, on the Company’s and Operating Partnership’s behalf, financing arrangements (including one or more credit facilities), repurchase agreements, interest rate or currency swap agreements, hedging arrangements, foreign exchange transactions, derivative transactions, and other agreements and instruments required or appropriate in connection with the Company’s and Operating Partnership’s activities;

(f) engaging and supervising, on the Company’s and Operating Partnership’s behalf and at the Company’s and Operating Partnership’s expense, independent contractors, advisors, consultants, attorneys, accountants, administrators, auditors, appraisers, independent valuation agents, escrow agents and other service providers (which may include Affiliates of the Adviser) that provide various services with respect to the Company and Operating Partnership, including, without limitation, on-site managers, building and maintenance personnel, investment banking, securities brokerage, mortgage brokerage, credit analysis, risk management services, asset management services, loan servicing, other financial, legal or accounting services, due diligence services, underwriting review services, and all other services (including custody and transfer agent and registrar services) as may be required relating to the Company’s and Operating Partnership’s activities or investments (or potential Investments);

(g) coordinating and managing operations of any Joint Venture or co-investment interests held by the Company or Operating Partnership and conducting matters with the Joint Venture or co-investment partners;

(h) communicating on the Company’s and Operating Partnership’s behalf with the holders of any of the Company’s equity or debt securities as required to satisfy the reporting and other requirements of any governmental bodies or agencies or trading markets and to maintain effective relations with such holders;

(i) advising the Company in connection with policy decisions to be made by the Board;

(j) engaging one or more subadvisors with respect to the management of the Company and Operating Partnership, including, where appropriate, Affiliates of the Adviser;

(k) evaluating and recommending to the Board hedging strategies and engaging in hedging activities on the Company’s and Operating Partnership’s behalf, consistent with the Company’s qualification as a REIT and with the Investment Guidelines;

(l) investing and reinvesting any moneys and securities of the Company and the Operating Partnership (including investing in short-term investments pending investment in other investments, payment of fees, costs and expenses, or payments of dividends or distributions to the Company’s stockholders and partners) and advising the Company as to the Company’s and Operating Partnership’s capital structure and capital raising;

 

6


(m) determining valuations for the Company’s Real Property and Real Estate-Related Assets and calculate, as of the last Business Day of each month, the Class T NAV per Share, Class S NAV per Share, Class D NAV per Share and Class I NAV per Share in accordance with the Valuation Guidelines, and in connection therewith, obtain appraisals performed by an Independent Appraiser and other independent third party appraisal firms concerning the value of the Real Properties and obtain market quotations or conduct fair valuation determinations concerning the value of Real Estate-Related Assets;

(n) providing input in connection with the appraisals performed by the Independent Appraisers;

(o) monitoring the Company’s Real Property and Real Estate Related Assets for events that may be expected to have a material impact on the most recent estimated values;

(p) monitoring each Independent Appraiser’s valuation process to ensure that it complies with the Company’s valuation guidelines;

(q) delivering to, or maintain on behalf of, the Company copies of appraisals obtained in connection with the investments in any Real Property;

(r) in the event that the Company is a commodity pool under the CEA, acting as the Company’s commodity pool operator for the period and on the terms and conditions set forth in this Agreement, including, for the avoidance of doubt, the authority to make any filings, submissions or registrations (including for exemptive or “no action” relief) to the extent required or desirable under the CEA (and the Company hereby appoints the Adviser to act in such capacity and the Adviser accepts such appointment and agrees to be responsible for such services);

(s) placing, or arranging for the placement of, orders of Real Estate-Related Assets pursuant to the Adviser’s investment determinations for the Company and the Operating Partnership either directly with the issuer or with a broker or dealer (including any Affiliated broker or dealer); and

(t) performing such other services from time to time in connection with the management of the Company’s investment activities as the Board shall reasonably request and/or the Adviser shall deem appropriate under the particular circumstances.

4. AUTHORITY OF ADVISER.

(a) Pursuant to the terms of this Agreement (including the restrictions included in this Section 4 and in Section 7), and subject to the continuing and exclusive authority of the Board over the management of the Company, the Board (by virtue of its approval of this Agreement and authorization of the execution hereof by the officers of the Company) hereby delegates to the Adviser the authority to take, or cause to be taken, any and all actions and to execute and deliver any and all agreements, certificates, assignments, instruments or other documents and to do any and all things that, in the judgment of the Adviser, may be necessary or advisable in connection with the Adviser’s duties described in Section 3, including the making of any Investment that fits within the Company’s investment objectives, strategy and guidelines, policies and limitations and within the discretionary limits and authority as granted to the Adviser from time to time by the Board.

 

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(b) Notwithstanding the foregoing, any Investment that does not fit within the Investment Guidelines will require the prior approval of the Board or any duly authorized committee of the Board, as the case may be. Except as otherwise set forth herein, in the Investment Guidelines or in the Charter, any Investment that fits within the Investment Guidelines may be made by the Adviser on the Company’s or the Operating Partnership’s behalf without the prior approval of the Board or any duly authorized committee of the Board.

(c) The prior approval of a majority of the Directors (including a majority of the Independent Directors) not otherwise interested in the transaction will be required for each transaction to which the Adviser or its Affiliates is a party.

(d) The Board will review the Investment Guidelines with sufficient frequency and at least annually and may, at any time upon the giving of notice to the Adviser, amend the Investment Guidelines; provided , however , that such modification or revocation shall be effective upon receipt by the Adviser or such later date as is specified by the Board and included in the notice provided to the Adviser and such modification or revocation shall not be applicable to investment transactions to which the Adviser has committed the Company or the Operating Partnership prior to the date of receipt by the Adviser of such notification, or if later, the effective date of such modification or revocation specified by the Board.

(e) The Adviser may retain, for and on behalf, and at the sole cost and expense, of the Company, such services as the Adviser deems necessary or advisable in connection with the management and operations of the 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 the Directors (including a majority of the Independent Directors) not otherwise interested in such transactions as being fair and reasonable to the Company and on terms and conditions not less favorable to the Company than those available from non-Affiliated third parties. In performing its duties under Section 3, the Adviser shall be entitled to rely reasonably on qualified experts and professionals (including, without limitation, accountants, legal counsel and other professional service providers) hired by the Adviser at the Company’s sole cost and expense.

5. BANK ACCOUNTS.  The Adviser may establish and maintain one or more bank accounts in the name of the Company and the Operating Partnership and any subsidiary thereof and may collect and deposit into any such account or accounts, and disburse from any such account or accounts, any money on behalf of the Company or the Operating Partnership, consistent with the Adviser’s authority under this Agreement, provided that no funds shall be commingled with the funds of the Adviser; and the Adviser shall from time to time render, upon request by the Board, its audit committee or the auditors of the Company, appropriate accountings of such collections and payments to the Board, its audit committee and the auditors of the Company, as applicable.

6. RECORDS; ACCESS.  The Adviser shall maintain appropriate records of its activities hereunder and make such records available for inspection by the Board and by counsel, auditors and authorized agents of the Company, at any time or from time to time during normal business hours. The Adviser shall at all reasonable times have access to the books and records of the Company and the Operating Partnership.

 

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7. LIMITATIONS ON ACTIVITIES.  The Adviser shall refrain from any action that, in its sole judgment made in good faith, (i) is not in compliance with the Investment Guidelines, (ii) would adversely and materially affect the qualification of the Company as a REIT under the Code or the Company’s and the Operating Partnership’s status as entities excluded from investment company status under the Investment Company Act, or (iii) would materially violate any law, rule or regulation of any governmental body or agency having jurisdiction over the Company and the Operating Partnership or of any exchange on which the securities of the Company may be listed or that would otherwise not be permitted by the Charter, Bylaws or Operating Partnership Agreement. If the Adviser is ordered to take any action by the Board, the Adviser shall seek to notify the Board if it is the Adviser’s reasonable judgment that such action would adversely and materially affect such status or violate any such law, rule or regulation or the Charter, Bylaws or Operating Agreement. Notwithstanding the foregoing, neither the Adviser nor any of its Affiliates shall be liable to the Company, the Operating Partnership, the Board, or the Stockholders for any act or omission by the Adviser or any of its Affiliates, except as provided in Section 20 of this Agreement.

8. OTHER ACTIVITIES OF THE ADVISER.

(a) Nothing in this Agreement shall (i) prevent the Adviser or any of its Affiliates, officers, directors or employees from engaging in other businesses or from rendering services of any kind to any other Person or entity, whether or not the investment objectives or policies of any such other Person or entity are similar to those of the Company, including, without limitation, the sponsoring, closing and/or managing of any Other Blackstone Accounts, (ii) in any way bind or restrict the Adviser or any of its Affiliates, officers, directors or employees from buying, selling or trading any securities or commodities for their own accounts or for the account of others for whom the Adviser or any of its Affiliates, officers, directors or employees may be acting, or (iii) prevent the Adviser or any of its Affiliates from receiving fees or other compensation or profits from such activities described in this Section 8(a) which shall be for the Adviser’s (and/or its Affiliates’) sole benefit. While information and recommendations supplied to the Company shall, in the Adviser’s reasonable and good faith judgment, be appropriate under the circumstances and in light of the investment objectives and policies of the Company, such information and recommendations may be different in certain material respects from the information and recommendations supplied by the Adviser or any Affiliate of the Adviser to others (including, for greater certainty, the Other Blackstone Accounts and their investors, as described more fully in Section 8(b)).

(b) The Adviser and the Company acknowledge and agree that, notwithstanding anything to the contrary contained herein, (i) Affiliates of the Adviser sponsor, advise and/or manage Other Blackstone Accounts and may in the future sponsor, advise and/or manage additional Other Blackstone Accounts (including Select Opportunistic Blackstone Accounts), (ii) with respect to Other Blackstone Accounts with investment objectives or guidelines that overlap with the Company’s but that do not have priority over the Company, the Adviser and its Affiliates will allocate investment opportunities between the Company and such Other

 

9


Blackstone Accounts in accordance with Blackstone’s


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