Blackstone Real Estate Income Fund N-CSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-22900

Blackstone Real Estate Income Fund

(Exact name of registrant as specified in charter)

345 Park Avenue

New York, NY 10154

(Address of principal executive offices)

Blackstone Real Estate Income Advisors L.L.C.

Leon Volchyok

345 Park Avenue

New York, NY 10154

(Name and address of agent for service)

With copies to:

Rajib Chanda, Esq.

Sarah E. Cogan, Esq.

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017

Registrant’s telephone number, including area code: (212) 583-5000

Date of fiscal year end: December 31, 2018

Date of reporting period: June 30, 2018

Item 1. Reports to Shareholders.

The Report to Shareholders is attached hereto.

 Blackstone

Blackstone Real Estate Income Fund

Semi-Annual Report

For the Six-Months Ended June 30, 2018

TABLE OF CONTENTS

Blackstone Real Estate Income Fund
Shareholder Letter	1
Statement of Assets and Liabilities	3
Statement of Operations	4
Statement of Changes in Net Assets	5
Financial Highlights	6
Notes to Financial Statements	7
Supplemental Information (Unaudited)	14
Privacy Policy	15

BLACKSTONE REAL ESTATE INCOME FUND

Dear BREIF Shareholder,

We are pleased to present this semi-annual shareholder report for Blackstone Real Estate Income Fund (“Feeder Fund I”) and Blackstone Real Estate Income Master Fund and Subsidiary (the “Consolidated Master Fund”). Feeder Fund I, Blackstone Real Estate Income Fund II (“Feeder Fund II”) and the Consolidated Master Fund are collectively referred to as the “Funds” or “BREIF.” This report includes market commentary, performance commentary for the Funds, a listing of the Consolidated Master Fund’s investments and the unaudited financial statements for Feeder Fund I and the Consolidated Master Fund.

Market Commentary

The commercial mortgage-backed securities (“CMBS”) market outperformed relative to the high-yield market during the first half of 2018 (the “Period”).¹ Mezzanine bonds rated BBB- or below were the largest beneficiary of spread tightening as demand for high-yielding cash securities remained robust relative to muted supply. Conversely, senior investment-grade bonds came under pressure due in large part to rising treasury yields and concern over fund flows. The CMBS credit curve, as referenced by the basis between new issue conduit AAA and BBB- cash bond spreads, flattened by 59bps in the Period. Private label CMBS issuance decreased 17% in the Period to $40.5 billion and Conduit CMBS issuance decreased 28% in the Period to $27.0 billion.² In general, credit fundamentals remain very strong as commercial real estate prices continue to rise in late cycle conditions. However, pockets of underperformance persist in specific asset types and metropolitan statistical areas, particularly retail and suburban office assets in tertiary markets. As a result, we remain highly selective and continue to tactically add risk in markets and subsectors with strong credit fundamentals. Additionally, we expect to continue opportunistic sales of mezzanine and subordinate positions as credit curves continue to flatten.

United States equity and credit markets were driven by political and trade uncertainty as economic data remained strong. The Fed continued its tightening cycle, ultimately leading the 10-year treasury yield to hit its highest level in seven years.³ Indications of a rising inflation environment started to appear as crude oil hit a four-year high and core inflation ticked up to 2.9%. Trade tensions escalated quickly, threatening market confidence with pockets of volatility. We remain patient in our viewpoint, searching for opportunities to buy at compelling levels with a long term investment focus in mind. Overall, the U.S. economy continued its positive momentum and interest rates remained consistent with recent levels, but we continue to focus on the potential for further trade tensions, heightened inflation expectations, and upcoming U.S. elections as potential catalysts for volatility.

Fund Performance

The table below illustrates BREIF’s performance relative to its peer group⁴ during the 6-month, 12-month and three-year periods ending June 30, 2018 and the Fund’s inception-to-date.⁵ During the period, Feeder Fund I and Feeder Fund II experienced net outflows of $35 million and $84 million, respectively.

¹  JP Morgan Research and Bloomberg Barclays US Corporate High Yield Average OAS (LF98OAS Index) as of 6/30/2018.

²  JP Morgan Research as of 6/30/2018.

³  Bloomberg as of 6/30/2018.

⁴  Peer Group selected by BREIF’s investment manager.

⁵  Inception date of April 1, 2014. For inception-to-date total return calculations, the Peer Group excludes funds that were launched post BREIF inception.

1

Total Return6
	Feeder Fund I		Feeder Fund II				Peer Group4
			Advisor - Class I		Institutional - Class II
6 Months		4.30%		4.55%		4.68%		1.88%
12 Months		6.14%		6.67%		6.94%		4.26%
3 Years		4.52%		5.02%		5.30%		3.33%
ITD5		4.82%		5.33%		5.60%		3.76%

Net Assets
	December 2016			December 2017			June 2018
Net Asset Value
Feeder Fund I		$	599,139,112		$	592,691,352		$	583,199,393
Feeder Fund II		$	307,440,432		$	322,958,654		$	253,859,486
NAV per Share
Feeder Fund I		$	959.96		$	999.96		$	1,020.53
Feeder Fund II
Advisor - Class I		$	956.41		$	995.44		$	1,015.34
Institutional - Class II		$	966.22		$	1,006.29		$	1,026.50

Performance Drivers

BREIF’s investments in fixed rate, post-crisis conduit bonds provided the highest positive return during the Period, as CMBS spreads rallied due to robust demand from market participants. Additionally, BREIF’s investments in single-asset/single-borrower floating-rate securities provided strong returns as purchases in this sector rallied due to the attractiveness of owning floating rate securities in a rising interest rate environment. Overall, BREIF outperformed its Peer Group over the Period with strong credit selection, low exposure to retail properties and an interest rate hedged portfolio.

Portfolio Positioning

In spite of the strong market performance in 2018 driving spreads tighter, we continue to find interesting investment opportunities in the real estate debt market. The Funds increased exposure to later-vintage CMBX indices, which tightened significantly and outperformed most broad-based fixed income markets.⁷ While CMBX indices have performed well this year, we believe the relative value opportunity remains compelling as the index is still significantly cheaper than the underlying cash bond constituents and comparably rated corporate credit. The Funds also capitalized on the recent rally by selling longer duration bonds with less attractive credit profiles that benefitted from flattening credit curves. We believe the risk adjusted returns for residential credit securities are compelling; global residential housing fundamentals remain positive due to depressed new construction levels and robust household formation, which, coupled together, is leading to a favorable supply/demand technical. Overall, we remain primarily focused on securities with strong fundamental collateral characteristics. We have maintained a core portfolio of high-quality, short duration assets (3.7 years) backed by institutional-quality real estate, and will continue to focus the bulk of our opportunistic investing in sectors with attractive relative value propositions.

⁴  Peer Group selected by BREIF’s investment manager.

⁵  Inception date of April 1, 2014. For inception-to-date total return calculations, the Peer Group excludes funds that were launched post BREIF inception.

⁶  Total return is calculated assuming a purchase of common shares at the opening on the first day and a repurchase at closing on the last day of each period reported. Dividends and distributions are assumed for purposes of this calculation to be reinvested at prices obtained under the Funds’ dividend reinvestment plan. Total returns do not reflect brokerage commissions or early repurchase reductions, if any.

⁷  CMBX 6-10 tightened on average -23bps in 2018. Bloomberg Barclays Global High Yield Total Return Index (LG30TRUU Index) fell -2.74% in 2018.

2

Blackstone Real Estate Income Fund

Statement of Assets and Liabilities

As of June 30, 2018 (Unaudited)

Assets:
Investment in Consolidated Master Fund, at fair value	$	610,470,272
Cash		1,908,254
Receivable from Investment Manager		132,400
Other assets		19,904
Total assets		612,530,830
Liabilities:
Income distribution payable		2,305,524
Payable for shares repurchased		24,282,585
Payable for distribution fees		515,235
Payable for service fees		254,532
Subscriptions received in advance		1,908,180
Accrued expenses		65,381
Total liabilities		29,331,437
Net assets	$	583,199,393
Components of Net Assets:
Paid-in capital	$	579,797,844
Distributions in excess of net investment income		(4,979,227	)
Accumulated net realized loss		(4,098,208	)
Net unrealized appreciation		12,478,984
Net assets	$	583,199,393
Net Asset Value:
Net Assets	$	583,199,393
Shares of beneficial interest outstanding, $0.001 par value, unlimited shares authorized		571,465
Net asset value per share	$	1,020.53

See Notes to Financial Statements.

3

Blackstone Real Estate Income Fund

Statement of Operations

For the Six-Months Ended June 30, 2018 (Unaudited)

Investment Income and Expenses Allocated from Consolidated Master Fund:
Interest	$	21,598,581
Dividends		167,801
Expenses excluding Incentive Fees		(8,259,629	)
Incentive Fees		(4,878,752	)
Net investment income allocated from Consolidated Master Fund		8,628,001
Fund Interest:		241
Fund Expenses:
Distribution fees		1,498,732
Service fees		749,366
Registration fees		40,662
Printing and postage fees		49,589
Professional fees		25,440
Miscellaneous		13,516
Total Fund expenses		2,377,305
Less expenses reimbursed by Investment Manager		(10,157	)
Net Fund Expenses		2,367,148
Net investment income		6,261,094
Net Realized and Unrealized Gain (Loss) Allocated from Consolidated Master Fund:
Net realized gain (loss) from:
Investments in securities		5,834,177
Securities sold short		1,456,183
Forward foreign currency exchange contracts		(1,550,344	)
Foreign currency transactions		(1,276,020	)
Swap contracts		3,808,795
Net realized gain		8,272,791
Net change in unrealized appreciation on:
Investments in securities		33,649
Securities sold short		1,932,799
Forward foreign currency exchange contracts		1,991,893
Foreign currency translations		3,423,849
Swap contracts		3,363,266
Net change in unrealized appreciation		10,745,456
Net realized and unrealized gain		19,018,247
Net increase in net assets resulting from operations	$	25,279,341

See Notes to Financial Statements.

4

Blackstone Real Estate Income Fund

Statement of Changes in Net Assets

	Six-Months Ended 6/30/2018 (unaudited)			Year Ended 12/31/2017
Increase (Decrease) in Net Assets
Operations:
Net investment income	$	6,261,094		$	25,781,393
Net realized gain		8,272,791			14,619,270
Net change in unrealized appreciation		10,745,456			8,475,044
Net increase in net assets resulting from operations		25,279,341			48,875,707
Distributions:
Distributions from net investment income to shareholders		(13,159,788	)		(24,259,655	)
Capital Transactions:
Shareholder subscriptions		9,697,495			20,054,234
Shareholder reinvestments		8,723,900			16,440,195
Shareholder repurchases		(40,032,907	)		(67,567,094	)
Net decrease in net assets resulting from capital transactions		(21,611,512	)		(31,072,665	)
Early withdrawal fees		—			8,853
Net decrease in net assets		(9,491,959	)		(6,447,760	)
Net Assets:
Beginning of period		592,691,352			599,139,112
End of period	$	583,199,393		$	592,691,352
Undistributed (distributions in excess of) net investment income	$	(4,979,227	)	$	1,919,467
Change in Shares Outstanding:
Beginning of period		592,714			624,131
Shares issued for shareholder subscriptions		9,595			20,192
Reinvestment in Shares		8,606			16,503
Shares repurchased		(39,450	)		(68,112	)
End of period		571,465			592,714

See Notes to Financial Statements.

5

Blackstone Real Estate Income Fund

Financial Highlights

(For Shares Outstanding Throughout the Period)

	Six-Months Ended 6/30/2018 (unaudited)			Year Ended 12/31/2017			Year Ended 12/31/2016			Year Ended 12/31/2015			Year Ended 12/31/2014(a)
Net Asset Value, Beginning of Period	$	999.96		$	959.96		$	1,011.56		$	1,004.74		$	1,000.00
Income From Investment Operations:
Net investment income(b)		10.56			42.34			36.10			28.93			10.37
Net realized and unrealized gain (loss)		32.16			37.43			(25.87	)		18.13			10.04
Net income from investment operations		42.72			79.77			10.23			47.06			20.41
Less Distributions to Shareholders:
Distribution of net investment income to shareholders		(22.15	)		(39.78	)		(61.85	)		(33.30	)		(15.67	)
Distribution of net realized capital gains to shareholders		—			—			—			(6.98	)		—
Total Distributions		(22.15	)		(39.78	)		(61.85	)		(40.28	)		(15.67	)
Early Withdrawal Fees		—			0.01			0.02			0.04			—
Net Asset Value, End of Period	$	1,020.53		$	999.96		$	959.96		$	1,011.56		$	1,004.74
Total Return on Net Asset Value		4.30	%(c)		8.39	%		1.13	%		4.68	%		2.04	%(c)
Ratios to Average Net Assets:
Expenses for the Feeder Fund I before reimbursement and waiver from Investment Manager and allocated Incentive Fees(d)		4.61	%(e)		4.67	%		4.82	%		4.62	%		4.28	%(e)
Allocated Incentive Fees of the Feeder Fund I(d)		1.63	%(e)		1.57	%		0.43	%		0.85	%		0.52	%(e)
Total expenses for the Feeder Fund I before reimbursement and waiver from Investment Manager(d)		6.24	%(e)		6.24	%		5.25	%		5.47	%		4.80	%(e)
Reimbursement and waiver from Investment Manager(f)		(1.07	)%(e)		(1.06	)%		(1.07	)%		(1.12	)%		(0.57	)%(e)
Total expenses for the Feeder Fund I after reimbursement and waiver from Investment Manager(d)		5.17	%(e)		5.18	%		4.18	%		4.35	%		4.23	%(e)
Net investment income excluding Incentive Fees for the Feeder Fund I		3.72	%(e)		5.82	%		4.15	%		3.66	%		1.89	%(e)
Net investment income of the Feeder Fund I		2.09	%(e)		4.25	%		3.72	%		2.81	%		1.37	%(e)
Supplementary Data:
Net assets, end of period (in thousands)	$	583,199		$	592,691		$	599,139		$	620,436		$	442,504
Portfolio turnover(g)		50	%(h)		85	%		26	%		41	%		31	%(h)

^(a)  For the period April 1, 2014 (commencement of investment operations) through December 31, 2014.

^(b)  Calculated using average shares outstanding during the period.

^(c)  Total Return has not been annualized.

^(d)  Includes the Feeder Fund I’s share of the Consolidated Master Fund’s allocated expenses.

^(e)  Financial ratios have been annualized.

^(f)  The reimbursement includes expenses incurred by the Feeder Fund I and the Consolidated Master Fund. See Note 4.

^(g)  The Feeder Fund I is invested solely in the Consolidated Master Fund, therefore this ratio reflects the portfolio turnover for the Consolidated Master Fund.

^(h)  Percentage represents the results for the period presented and are not annualized.

See Notes to Financial Statements.

6

Blackstone Real Estate Income Fund

Notes to Financial Statements

For the Period Ended June 30, 2018 (Unaudited)

1. Organization

Blackstone Real Estate Income Fund (the “Feeder Fund I”), a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), is a continuously offered non-diversified, closed-end management investment company. The Feeder Fund I commenced investment operations on April 1, 2014. The Feeder Fund I’s investment objective is to seek long-term total return, with an emphasis on current income, by primarily investing in a broad range of real estate-related debt investments. The Feeder Fund I pursues its investment objective by investing substantially all of its assets in Blackstone Real Estate Income Master Fund (the “Master Fund”), a Delaware statutory trust registered under the 1940 Act as a closed-end management investment company with the same investment objective and substantially the same investment policies as the Feeder Fund I. The Master Fund consolidates a wholly-owned subsidiary, Blackstone Real Estate Income Master Fund (Cayman) Ltd. (the “Subsidiary” and together with the Master Fund, the “Consolidated Master Fund”).

The investment manager of the Consolidated Master Fund and the Feeder Fund I is Blackstone Real Estate Income Advisors L.L.C. (the “Investment Manager”), an investment advisor registered under the Investment Advisers Act of 1940, as amended. The Board of Trustees (the “Board” and each member thereof, a “Trustee”) of the Consolidated Master Fund and the Feeder Fund I supervises the conduct of the Consolidated Master Fund’s and the Feeder Fund I’s affairs and, pursuant to their investment management agreements, has engaged the Investment Manager to manage the Consolidated Master Fund’s and the Feeder Fund I’s day-to-day investment activities and operations.

The Consolidated Master Fund’s financial statements, which are attached hereto, are an integral part of these financial statements and should be read in conjunction with the Feeder Fund I’s financial statements. At June 30, 2018, Feeder Fund I held an approximately 65% ownership interest in the Consolidated Master Fund.

Capitalized terms used, but not defined herein, shall have the meaning assigned to them in the Prospectus of the Feeder Fund I.

2. Summary of Significant Accounting Policies

Basis of Presentation

The Feeder Fund I is an investment company in accordance with Accounting Standards Codifications 946, Financial Services—Investment Companies (“ASC 946”), which defines investment companies and prescribes specialized accounting and reporting requirements for investment companies.

The Feeder Fund I’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are stated in U.S. dollars, unless otherwise noted.

The preparation of financial statements in conformity with U.S. GAAP requires the Investment Manager to make estimates and assumptions that affect the amounts in the financial statements and accompanying notes. The Investment Manager believes that the estimates utilized in preparing the financial statements are reasonable and prudent; however, actual results may differ from these estimates.

Investment in Consolidated Master Fund and Fair Value Measurement

The Feeder Fund I’s investment in the Consolidated Master Fund is recorded at fair value and is based upon the Feeder Fund I’s percentage ownership of the net assets of the Consolidated Master Fund. The

7

Blackstone Real Estate Income Fund

Notes to Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

performance of the Feeder Fund I is directly affected by the performance of the Consolidated Master Fund. See Note 2 to the Consolidated Master Fund’s Financial Statements for the determination of fair value of the Consolidated Master Fund’s investments.

Investment Transactions and Related Investment Income and Expense

Investment transactions are accounted for on a trade date basis. The Feeder Fund I’s net investment income or loss consists of the Feeder Fund I’s pro-rata share of the net investment income or loss of the Consolidated Master Fund, less all expenses of the Feeder Fund I. Realized and unrealized gains and losses from sale of investments consist of the Feeder Fund I’s pro-rata share of the Consolidated Master Fund’s realized and unrealized gains and losses.

Cash

As of June 30, 2018, the Feeder Fund I held $1,908,254 at a major U.S. bank.

Contingencies

Under the Feeder Fund I’s Amended and Restated Agreement and Declaration of Trust (the “Declaration of Trust”), the Feeder Fund I’s officers and each Trustee are indemnified against certain liabilities that may arise out of the performance of their duties to the Feeder Fund I. Additionally, in the normal course of business, the Feeder Fund I may enter into contracts that contain a variety of representations and indemnification obligations and expects the risk of loss to be remote.

Income Taxes

The Feeder Fund I’s policy is to comply with the provisions of Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and to distribute all of its investment company net taxable investment income and net capital gain realized on investments to its shareholders. Therefore, no federal income tax provision is required. The Feeder Fund I plans to file U.S. Federal and various state and local tax returns.

For the open tax years and all major jurisdictions, management of the Feeder Fund I has concluded that there are no uncertain tax positions that would require recognition in the consolidated financial statements. No income tax returns are currently under examination. The statute of limitations on the Feeder Fund I’s filed U.S. federal tax returns remains open for the fiscal years ended December 31, 2015 through December 31, 2017.

Dividends and Distributions to Shareholders

Dividends from net investment income are expected to be declared and paid quarterly. Distributions from capital gains are expected to be declared and paid at least annually. Dividends and capital gain distributions paid by the Feeder Fund I will be reinvested in additional common shares of beneficial interest, par value $0.001 per share, of the Feeder Fund I (“Shares”), unless a shareholder elects not to reinvest in Shares or is otherwise ineligible. Shares purchased by reinvestment are issued at their net asset value on the next valuation date following the ex-dividend date.

8

Blackstone Real Estate Income Fund

Notes to Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

3. Fund Terms

Issuance of Shares

The Feeder Fund I offers its Shares on a best efforts basis pursuant to a continuous offering registered with the Securities and Exchange Commission. The Feeder Fund I will issue Shares to eligible investors as of the first business day of the month or at such other times as determined by the Board upon receipt and acceptance of an initial or additional application for Shares. The Feeder Fund I reserves the right to reject any applications for subscriptions of Shares. Shares are subject to a maximum sales load of up to 3.00%. No public market exists for the Shares, and none is expected to develop. The Shares are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Feeder Fund I’s Declaration of Trust.

Repurchase of Shares

The Feeder Fund I may, from time to time, offer to repurchase a portion of its outstanding Shares pursuant to written tenders by shareholders. Repurchases will be made only at such times and on such terms as may be determined by the Board, in its complete and exclusive discretion. Shareholders who tender Shares within the 12- month period following acquisition will be subject to an early withdrawal fee of 2.00% of the aggregate net asset value of the Shares repurchased by the Feeder Fund I. In determining whether the Feeder Fund I should repurchase Shares from shareholders pursuant to written tenders, the Feeder Fund I’s Board will consider the Investment Manager’s recommendations. The Investment Manager expects that generally it will recommend to the Feeder Fund I’s Board that the Feeder Fund I offer to repurchase Shares from shareholders on a quarterly basis. Since the Feeder Fund I’s assets consist primarily of its investment in the Consolidated Master Fund, the ability of the Feeder Fund I to have its Shares in the Consolidated Master Fund repurchased is subject to the Consolidated Master Fund’s repurchase policy.

The timing, terms and conditions of any particular repurchase offer may vary at the sole discretion of the Board. Repurchase offers will generally commence approximately 95 days prior to the last day of March, June, September and December each year (each such last date is referred to as a “Tender Valuation Date”) and remain open for approximately 30 calendar days.

The following table presents the repurchase offers that occurred during the period ended June 30, 2018:

	Repurchase Offer #1	Repurchase Offer #2
Commencement Date	December 22, 2017	April 5, 2018
Repurchase Request Deadline	January 25, 2018	May 3, 2018
Repurchase Pricing Date	March 29, 2018	June 29, 2018
Amount Repurchased	$16,530,963	$23,501,944
Shares Repurchased	16,421	23,029

4. Investment Manager Fees and Other Related Party Transactions

Management Fee

The Consolidated Master Fund pays the Investment Manager an aggregate fixed management fee (the “Management Fee”), payable quarterly in arrears on the last business day of each quarter. The Management Fee accrues monthly at an annual rate of 1.50% of the Consolidated Master Fund’s Managed Assets at the end of such month before giving effect to the Management Fee payment being calculated or any purchases or repurchases of Consolidated Master Fund shares or any distributions by the Consolidated Master Fund. The Management Fee will reduce the net asset value of the Consolidated Master Fund (and indirectly, of the

9

Blackstone Real Estate Income Fund

Notes to Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

Feeder Fund I) as of the end of the accounting period in which it is payable and after the calculation of the Management Fee. The Management Fee for any period less than a full quarter will be prorated. Effective October 1, 2014 through December 31, 2018, the Investment Manager agreed to temporarily reduce its Management Fee to an annualized rate of 0.75% of the Consolidated Master Fund’s Managed Assets (“the Management Fee Waiver”). The Investment Manager may, in its sole discretion and at any time (including prior to December 31, 2018), elect to extend, terminate or modify its voluntary waiver. The Investment Manager will not charge the Feeder Fund I a Management Fee as long as substantially all of the assets of the Feeder Fund I are invested in the Consolidated Master Fund. The Feeder Fund I indirectly bears a pro-rata share of the Consolidated Master Fund’s Management Fee, which was $3,200,188, net of the Management Fee Waiver, for the period ended June 30, 2018.

Incentive Fee

The Consolidated Master Fund accrues a performance-based incentive fee (the “Incentive Fee”) on a monthly basis throughout the fiscal year of the Consolidated Master Fund. The Incentive Fee is paid to the Investment Manager promptly after the end of each fiscal year of the Consolidated Master Fund. The Incentive Fee is determined as of the end of the fiscal year in an amount equal to 15% of the amount by which the Consolidated Master Fund’s Net Capital Appreciation (as defined below) for each Fiscal Period ending within or coterminous with the close of such fiscal year exceeds the balance of the loss carryforward account and any allocated Management Fee expense for such Fiscal Period, without duplication for any Incentive Fees paid during such fiscal year. The Consolidated Master Fund also pays the Investment Manager the Incentive Fee in the event a Fiscal Period is triggered in connection with a repurchase offer by the Consolidated Master Fund. For purposes of calculating the Incentive Fee, “Net Capital Appreciation” means, with respect to any Fiscal Period, the difference, if any, between (x) the sum of (i) the value of the Consolidated Master Fund’s net asset value at the end of that Fiscal Period (prior to the Incentive Fee for such Fiscal Period) increased by the dollar amount of the Consolidated Master Fund’s interests repurchased during the Fiscal Period (excluding repurchases as of the last day of the Fiscal Period after determination of the Incentive Fee), (ii) the amount of any dividends, distributions or withdrawals paid to shareholders during the Fiscal Period and not reinvested in the Consolidated Master Fund (excluding any dividends, distributions or withdrawals to be paid as of the last day of the Fiscal Period), and (iii) the Management Fee expense for that Fiscal Period, and (y) the sum of (i) the value of the Consolidated Master Fund’s net asset value at the beginning of that Fiscal Period (prior to the Management Fee for such Fiscal Period), increased by the dollar amount of the Consolidated Master Fund’s interests issued during the Fiscal Period (excluding any Shares issued in connection with the reinvestment of dividends and other distributions paid by the Consolidated Master Fund) and (ii) the amount of any subscriptions to the Consolidated Master Fund during that Fiscal Period. All calculations of Net Capital Appreciation will be made (without duplication) after deduction of all general, administrative and other operating expenses of the Consolidated Master Fund (excluding the Incentive Fee) and any amounts necessary, in the Investment Manager’s sole discretion, as appropriate reserves for such expenses. The Investment Manager will not charge the Feeder Fund I an Incentive Fee as long as substantially all of the assets of the Feeder Fund I are invested in the Consolidated Master Fund. The Feeder Fund I indirectly bears a pro-rata share of the Consolidated Master Fund’s Incentive Fee, which was $4,878,752 for the period ended June 30, 2018.

Expense Limitation and Reimbursement

The Investment Manager has voluntarily entered into an Expense Limitation and Reimbursement Agreement (the “Expense Limitation and Reimbursement Agreement”) with the Feeder Fund I to limit the amount of the Feeder Fund I’s Specified Expenses (as defined below) to no more than 0.35% per annum of the Feeder Fund I’s net assets (the “Expense Cap”) (computed and applied on a monthly basis). Specified Expenses includes all expenses incurred in the business of the Feeder Fund I and the Feeder Fund I’s pro-rata share of the

10

Blackstone Real Estate Income Fund

Notes to Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

expenses incurred in the business of the Consolidated Master Fund, including organizational costs, with the exception of: (i) the Management Fee, (ii) the Incentive Fee, (iii) the Distribution and Service Fee, (iv) brokerage costs, (v) dividend/interest payments (including any dividend payments, interest expenses, commitment fees, or other expenses related to any leverage incurred by the Feeder Fund I or the Consolidated Master Fund), (vi) taxes, and (vii) extraordinary expenses (as determined in the sole discretion of the Investment Manager). To the extent that Specified Expenses for the Feeder Fund I (including the Feeder Fund I’s pro-rata share of the Consolidated Master Fund’s Specified Expenses) for any month exceed the Expense Cap, the Investment Manager will waive its fees and/or reimburse the Feeder Fund I for expenses to the extent necessary to eliminate such excess. The Expense Limitation and Reimbursement Agreement cannot be terminated prior to December 31, 2018 without the Board’s consent. The Feeder Fund I has agreed to repay the amounts borne by the Investment Manager under the Expense Limitation and Reimbursement Agreement within the three year period after the Investment Manager bears the expense, when and if requested by the Investment Manager, but only if and to the extent that the Specified Expenses of the Feeder Fund I (including the Feeder Fund I’s pro-rata share of the Consolidated Master Fund’s Specified Expenses) are less than the lower of the Expense Cap and any expense limitation agreement then in effect with respect to the Specified Expenses. The Investment Manager may recapture a Specified Expense in any year within the three-year period after the Investment Manager bears the expense. The Investment Manager is permitted to receive such repayment from the Feeder Fund I provided that the reimbursement amount does not raise the level of Specified Expenses of the Feeder Fund I (including the Feeder Fund I’s pro-rata share of the Consolidated Master Fund’s Specified Expenses) in the month the repayment is being made to a level that exceeds the Expense Cap or any other expense limitation agreement then in effect with respect to the Specified Expenses.

For the period ended June 30, 2018, the recoupments made by the Feeder Fund I to the Investment Manager were $225,143. As of June 30, 2018, the total repayments that may potentially be made by the Feeder Fund I to the Investment Manager is $861,834, of which $219,254 will expire by December 31, 2019, $407,279 will expire by December 31, 2020, and $235,501 will expire by December 31, 2021.

Distribution Agreement and Service Plan

Blackstone Advisory Partners L.P., an affiliate of the Investment Manager, acts as the distributor of the Shares (the “Distributor”). Pursuant to a distribution agreement between the Feeder Fund I and the Distributor, the Feeder Fund I pays the Distributor a fee (the “Distribution and Service Fee”) equal to 0.75% (annualized) of the average net assets of the Feeder Fund I, in accordance with the Feeder Fund I’s Distribution and Service Plan. The Distribution and Service Fee consists of 0.50% for the sale and marketing of the Shares and 0.25% for personal services provided to shareholders and/or the maintenance of shareholder accounts and to reimburse the Distributor for related expenses incurred. The Distributor may pay all or a portion of the Distribution and Service Fee to the selling agents that sell Shares. The Feeder Fund I’s Distribution and Service Fees were $1,498,732 and $749,366, respectively, for the period ended June 30, 2018.

5. Administration Agreements

The Consolidated Master Fund and the Feeder Fund I have entered into administration, custody and transfer agency agreements (the “Administration Agreements”) with State Street Bank and Trust Company (“State Street”). State Street and/or its affiliates are responsible for providing administration, custody and transfer agency services for the Consolidated Master Fund and the Feeder Fund I, including, but not limited to: (i) maintaining corporate and financial books and records of the Consolidated Master Fund and the Feeder Fund I, (ii) providing administration services and (iii) performing other accounting and clerical services

11

Blackstone Real Estate Income Fund

Notes to Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

necessary in connection with the administration of the Consolidated Master Fund and the Feeder Fund I. The services performed by State Street may be completed by one or more of its affiliated companies.

6. Financial Instruments and Off-Balance Sheet Risk

Market Risk: In the normal course of business, the Consolidated Master Fund invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit and counterparty risk). The value of securities held by the Consolidated Master Fund may decline in response to certain events, including those directly involving the companies whose securities are owned by the Consolidated Master Fund; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations.

Derivatives Risks: The Consolidated Master Fund enters into derivatives transactions which may include, without limitation, options contracts, futures contracts, options on futures contracts, forward contracts, interest rate swaps, total return swaps, credit default swaps and other swap agreements for investment, hedging or leverage purposes. The Consolidated Master Fund’s use of derivative instruments may be particularly speculative and involves investment risks and transaction costs to which the Consolidated Master Fund would not be subject absent the use of these instruments, and the use of derivatives generally involves leverage in the sense that the investment exposure created by the derivatives may be significantly greater than the Consolidated Master Fund’s initial investment in the derivatives. Thus, the use of derivatives may result in losses in excess of principal or greater than if they had not been used. The ability to successfully use derivative instruments depends on the ability of the Investment Manager. The skills needed to employ derivatives strategies are different from those needed to select portfolio security and, in connection with such strategies, the Investment Manager must make predictions with respect to market conditions, liquidity, currency movements, market values, interest rates and other applicable factors, which may be inaccurate.

Credit and Counterparty Risk: The Consolidated Master Fund will be subject to credit risk with respect to the counterparties to its derivatives contracts (whether a clearing corporation in the case of exchange-traded instruments or another third party in the case of over-the-counter (“OTC”) instruments) entered into by the Consolidated Master Fund. Counterparty risk is the risk that the other party in a derivative transaction will not fulfill its contractual obligation. Changes in the credit quality of the companies that serve as the Consolidated Master Fund’s counterparties with respect to their derivative transactions will affect the value of those instruments. By entering into derivatives, the Consolidated Master Fund assumes the risks that theses counterparties could experience financial hardships that could call into question their continued ability to perform their obligations. As a result, concentration of such derivatives in any one counterparty would subject the Consolidated Master Fund to an additional degree of risk with respect to defaults by such counterparty. The Investment Manager will monitor the creditworthiness of counterparties in order to evaluate that such counterparties can perform their obligations under the relevant agreements. If a counterparty becomes bankrupt or otherwise fails to perform its obligations under a derivative contract due to financial difficulties, the Consolidated Master Fund may experience significant delays in obtaining any recovery under the derivative contract in a dissolution, assignment for the benefit of creditors, liquidation, winding-up, bankruptcy or other analogous proceeding. In addition, in the event of the insolvency of a counterparty to a derivative transaction, the derivative contract would typically be terminated at its fair market value. If the Consolidated Master Fund is owed this fair market value in the termination of the derivative contract and its claim is unsecured, the Consolidated Master Fund will be treated as a general creditor of such counterparty, and will not have any claim with respect to the underlying security. The Consolidated Master Fund may obtain only a limited recovery or may obtain no recovery in such circumstances.

12

Blackstone Real Estate Income Fund

Notes to Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

Currently, certain categories of interest rate and credit default swaps are subject to mandatory clearing, and more are expected to be cleared in the future. The counterparty risk for cleared derivatives is generally lower than for uncleared OTC derivative transactions because generally a clearing organization becomes substituted for each counterparty to a cleared derivative contract and, in effect, guarantees the parties’ performance under the contract as each party to a trade looks only to the clearing house for performance of financial obligations. However, there can be no assurance that a clearing house, or its members, will satisfy the clearing house’s obligations to the Consolidated Master Fund. Cash collateral that has been pledged to cover obligations of the Consolidated Master Fund under derivative financial instrument contracts, if any, will be reported separately in the Consolidated Statement of Assets and Liabilities. Securities pledged as collateral, if any, for the same purpose are noted in the Consolidated Schedule of Investments.

Liquidity Risk: Some securities held by the Consolidated Master Fund may be difficult to sell, or illiquid, during times of market turmoil or otherwise. Illiquid securities may also be difficult to value. If the Consolidated Master Fund is forced to sell an illiquid asset to meet repurchase requests or other cash needs, the Consolidated Master Fund may be forced to sell at a loss or at a price lower than it could have otherwise received.

Non-Diversification Risk: The Consolidated Master Fund is classified as a “non-diversified” investment company which means that the percentage of its assets that may be invested in the securities of a single issuer is not limited by the 1940 Act. As a result, the Consolidated Master Fund’s investment portfolio may be subject to greater risk and volatility than if investments had been made in the securities of a broad range of issuers.

Additional risks associated with each type of investment are described within the respective security type notes. The Feeder Fund I’s prospectus includes a discussion of the principal risks of investing in the Feeder Fund I and indirectly in the Consolidated Master Fund.

7. Subsequent Events

The Investment Manager has evaluated the impact of subsequent events through the date of financial statement issuance, and determined there were no subsequent events outside the normal course of business requiring adjustment to or disclosure in the financial statements.

13

Blackstone Real Estate Income Fund

Supplemental Information

June 30, 2018 (Unaudited)

Form N-Q Filings

The Feeder Fund I files a complete schedule of portfolio holdings with the Securities and Exchange Commission (the “SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Feeder Fund I’s Form N-Q is available on the SEC’s website at http://www.sec.gov within 60 days after the Feeder Fund I’s first and third fiscal quarters. The Feeder Fund I’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and information regarding operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Holdings and allocations shown on any Form N-Q are as of the date indicated in the filing and may not be representative of future investments. Holdings and allocations should not be considered research or investment advice and should not be relied upon in making investment decisions.

Proxy Voting Policies

The Feeder Fund I and the Consolidated Master Fund have delegated proxy voting responsibilities to the Investment Manager, subject to the Board’s general oversight. A description of the policies and procedures used to vote proxies related to the Feeder Fund I’s and the Consolidated Master Funds’ portfolio securities, and information regarding how the Feeder Fund I and Consolidated Master Fund voted proxies relating to their portfolio securities during the most recent 6-month period ended June 30 is available (1) without charge, upon request, by calling toll free, 1-800-248-1621 and (2) on the SEC’s website at http://www.sec.gov.

Additional Information

The Feeder Fund I’s registration statement includes additional information about the Trustees of the Consolidated Master Fund. The registration statement is available, without charge, upon request by calling 1-855-890-7725.

14

  Blackstone

Blackstone Registered Funds

Privacy Notice

Rev January, 2018

FACTS WHAT DO BLACKSTONE REGISTERED FUNDS DO WITH YOUR PERSONAL INFORMATION?

Why? Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.

What? The types of personal information we collect and share depend on the product or service you have with us. This information can include:   ∎   Social Security number and income   ∎   Assets and investment experience   ∎   Risk tolerance and transaction history

How? All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Blackstone Registered Funds (as defined below) choose to share; and whether you can limit this sharing.

Reasons we can share your personal information	Do Blackstone Registered Funds share?	Can you limit this sharing?
For our everyday business purposes— such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes— to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don’t share
For our affiliates’ everyday business purposes— information about your transactions and experiences	No	We don’t share
For our affiliates’ everyday business purposes— information about your creditworthiness	No	We don’t share
For our affiliates to market to you	No	We don’t share
For nonaffiliates to market to you	No	We don’t share

Questions? Email us at GLB.privacy@blackstone.com

15

Who we are
Who is providing this notice?	Blackstone Registered Funds include Blackstone Alternative Alpha Fund, Blackstone Alternative Alpha Fund II, Blackstone Real Estate Income Fund, Blackstone Real Estate Income Fund II, Blackstone Alternative Investment Funds, on behalf of its series Blackstone Alternative Multi-Strategy Fund, Blackstone Diversified Multi-Strategy Fund, a sub-fund of Blackstone Alternative Investment Funds plc, and the GSO Funds, consisting of Blackstone / GSO Senior Floating Rate Term Fund, Blackstone / GSO Long-Short Credit Income Fund, Blackstone / GSO Strategic Credit Fund and Blackstone / GSO Floating Rate Enhanced Income Fund
What we do
How do Blackstone Registered Funds protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.
How do Blackstone Registered Funds collect my personal information?	We collect your personal information, for example, when you: ∎   open an account or give us your income information ∎   provide employment information or give us your contact information ∎   tell us about your investment or retirement portfolio We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can’t I limit all sharing?	Federal law gives you the right to limit only: ∎   sharing for affiliates’ everyday business purposes—information about your creditworthiness ∎   affiliates from using your information to market to you ∎   sharing for nonaffiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.
What happens when I limit sharing for an account I hold jointly with someone else?	Your choices will apply to everyone on your account—unless you tell us otherwise.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and nonfinancial companies. ∎   Our affiliates include companies with a Blackstone name and financial companies such as GSO Capital Partners LP and Strategic Partners Fund Solutions.
Nonaffiliates	Companies not related by common ownership or control. They can be financial and nonfinancial companies. ∎   Blackstone Registered Funds do not share with nonaffiliates so they can market to you.
Joint marketing	A formal agreement between nonaffiliated financial companies that together market financial products or services to you. ∎   Our joint marketing partners include financial services companies.
Other important information
California Residents—In accordance with California law, we will not share information we collect about California residents with nonaffiliates except as permitted by law, such as with the consent of the customer or to service the customer’s accounts. We will also limit the sharing of information about you with our affiliates to the extent required by applicable California law. Vermont Residents—In accordance with Vermont law, we will not share information we collect about Vermont residents with nonaffiliates except as permitted by law, such as with the consent of the customer or to service the customer’s accounts. We will not share creditworthiness information about Vermont residents among Blackstone Registered Funds’ affiliates except with the authorization or consent of the Vermont resident.

16

Blackstone Real Estate Income Fund

Trustees

Michael B. Nash, Chairman

Benedict Aitkenhead

Edward H. D’Alelio

Michael Holland

Thomas W. Jasper

Investment Manager

Blackstone Real Estate Income Advisors L.L.C.

345 Park Avenue

New York, New York 10154

Administrator, Custodian, Fund Accounting Agent and Transfer Agent

State Street Bank and Trust Company

One Lincoln Street

Boston, MA 02111

Officers

Jonathan Pollack, President and Chief Executive Officer

Anthony F. Marone, Jr., Chief Financial Officer and Treasurer

Leon Volchyok, Chief Legal Officer, Chief Compliance Officer and Secretary

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

30 Rockefeller Plaza

New York, New York 10112

Legal Counsel

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

This report, including the financial information herein, is transmitted to the shareholders of Blackstone Real Estate Income Fund for their information. It is not a prospectus or representation intended for use in the purchase of shares of the Feeder Fund I or any securities mentioned in this report.

You can request a copy of the Feeder Fund I’s prospectus and statement of additional information without charge by calling the Feeder Fund I’s transfer agent at 1-855-890-7725.

Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, and Rule 23c-1 thereunder that from time to time Feeder Fund I may repurchase its common shares from its shareholders.

Additional information regarding the Funds is available at https://www.blackstone.com/the-firm/asset-management/registered-funds.

 Blackstone

Blackstone Real Estate Income Master Fund and Subsidiary

Semi-Annual Report

For the Six-Months Ended June 30, 2018

TABLE OF CONTENTS

Blackstone Real Estate Income Master Fund and Subsidiary
Consolidated Schedule of Investments	1
Consolidated Statement of Assets and Liabilities	25
Consolidated Statement of Operations	26
Consolidated Statement of Changes in Net Assets	27
Consolidated Statement of Cash Flows	28
Consolidated Financial Highlights	29
Consolidated Notes to Financial Statements	30
Supplemental Information (Unaudited)	49
Privacy Policy	50

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments

June 30, 2018 (Unaudited)

Portfolio Composition	Percentage of Total Net Assets
Commercial Mortgage-Backed Securities		84.2	%
Residential Mortgage-Backed Securities		17.3
Interest Only Commercial Mortgage-Backed Securities		0.7
Collateralized Debt Obligations		0.4
Mezzanine Debt		15.8
Bank Loan		5.9
High Yield Bonds & Notes		4.6
Common Stock		0.6
Money Market Fund		3.9
Securities Sold Short		(16.7	)
Other Liabilities in Excess of Other Assets(1)		(16.7	)
Total		100.0	%

⁽¹⁾  Assets, other than investments in securities, net of other liabilities. See Consolidated Statement of Assets and Liabilities.

See Notes to Consolidated Financial Statements.

1

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

	Principal Amount		Value
LONG-TERM INVESTMENTS — 129.5%
COMMERCIAL MORTGAGE-BACKED SECURITIES — 84.2%
Ashford Hospitality Trust,
Series 2018-ASHF, Class D, 1 mo. USD LIBOR + 2.10%, 4.17%, 04/15/35 (a),(b),(c)	$	483,000	$	483,334
Series 2018-ASHF, Class E, 1 mo. USD LIBOR + 3.10%, 5.17%, 04/15/35 (a),(b),(c)		11,034,000		11,049,844
Ashford Hospitality Trust,
Series 2018-KEYS, Class D, 1 mo. USD LIBOR + 2.75%, 4.80%, 05/15/35 (a),(b)		8,961,000		8,968,042
Series 2018-KEYS, Class E, 1 mo. USD LIBOR + 4.15%, 6.20%, 05/15/35 (a),(b)		7,410,000		7,415,377
BAMLL Re-REMIC Trust, Series 2014-FRR9, Class F, 1 mo. USD LIBOR + 20.15%, 3.90%, 12/26/46 (a),(b)		24,735,938		25,569,366
Banc of America Commercial Mortgage Trust, Series 2005-5, Class F, 5.65%, 10/10/45 (a),(b)		674,792		681,004
Bear Stearns Commercial Mortgage Securities Trust, Series 2005-PWR9, Class F, 5.23%, 09/11/42 (a),(b)		1,328,000		1,332,464
Bear Stearns Commercial Mortgage Securities Trust, Series 2006-PW12, Class D, 5.92%, 09/11/38 (a),(b)		1,351,445		844,849
Bear Stearns Commercial Mortgage Securities Trust, Series 2006-T24, Class B, 5.66%, 10/12/41 (a),(b),(d)		2,843,974		2,657,638
BHMS Mortgage Trust,
Series 2014-ATLS, Class DFL, 1 mo. USD LIBOR + 3.00%, 4.98%, 07/05/33 (a),(b),(c),(d)		2,366,000		2,368,871
Series 2014-ATLS, Class DFX, 5.48%, 07/05/33 (a),(b),(c)		5,025,000		5,028,457
Series 2014-ATLS, Class EFL, 1 mo. USD LIBOR + 4.00%, 5.98%, 07/05/33 (a),(b),(c)		10,000,000		9,996,408
Series 2014-ATLS, Class EFX, 6.25%, 07/05/33 (a),(b),(c)		3,765,000		3,767,367
CFCRE Commercial Mortgage Trust, Series 2017-C8, Class D, 3.00%, 06/15/50 (a),(c)		5,577,000		4,100,107
Citigroup Commercial Mortgage Trust,
Series 2012-GC8, Class D, 5.04%, 09/10/45 (a),(b),(c),(d)		3,923,000		3,658,146
Series 2012-GC8, Class E, 5.00%, 09/10/45 (a),(b),(d)		6,296,926		5,318,777
Citigroup Commercial Mortgage Trust, Series 2014-GC19, Class E, 4.56%, 03/10/47 (a),(b)		100,000		75,356
Citigroup Commercial Mortgage Trust, Series 2016, Class P5, 3.00%, 10/10/49 (a),(d)		1,008,000		790,709
Citigroup Commercial Mortgage Trust, Series 2016-P6, Class D, 3.25%, 12/10/49 (a),(d)		1,208,000		949,602
Colony Starwood Homes Trust, Series 2016-1A, Class E, 1 mo. USD LIBOR + 4.15%, 6.24%, 07/17/33 (a),(b)		6,295,000		6,339,345
Commercial Mortgage Pass Through Certificates,
Series 2016-CR28, Class D, 4.05%, 02/10/49 (b),(c)		688,000		630,552
Series 2016-CR28, Class F, 3.25%, 02/10/49 (a)		13,754,000		9,602,123

See Notes to Consolidated Financial Statements.

2

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

	Principal Amount		Value
Series 2016-CR28, Class G, 3.25%, 02/10/49 (a)	$	5,951,000	$	3,495,452
Series 2016-CR28, Class H, 3.25%, 02/10/49 (a)		9,169,000		4,362,198
Series 2016-CR28, Class J, 3.25%, 02/10/49 (a)		15,121,412		3,829,248
Commercial Mortgage Trust, Series 2005-C6, Class G, 5.85%, 06/10/44 (a),(b)		2,145,574		1,270,663
Commercial Mortgage Trust, Series 2006-CD3 SEQ, Class AJ, 5.69%, 10/15/48 (d)		9,634,207		4,680,332
Commercial Mortgage Trust, Series 2012-CR5, Class F, 4.46%, 12/10/45 (a),(b)		7,007,595		5,370,267
Commercial Mortgage Trust, Series 2013-CR11, Class G, 4.27%, 08/10/50 (a),(b),(d)		21,428,233		7,530,847
Commercial Mortgage Trust,
Series 2013-CR8, Class D, 4.08%, 06/10/46 (a),(b),(c)		13,235,000		12,441,813
Series 2013-CR8, Class E, 4.00%, 06/10/46 (a),(b),(c)		9,423,992		7,793,508
Series 2013-CR8, Class F, 4.00%, 06/10/46 (a),(b)		2,877,000		2,006,508
Commercial Mortgage Trust, Series 2013-LC13, Class D, 5.29%, 08/10/46 (a),(b),(c),(d)		2,218,000		2,118,345
Commercial Mortgage Trust, Series 2014-CR15, Class D, 4.90%, 02/10/47 (a),(b),(d)		1,012,000		972,109
Commercial Mortgage Trust,
Series 2014-FL5, Class KH1, 1 mo. USD LIBOR + 3.65%, 5.57%, 08/15/31 (a),(b),(c),(d)		16,248,737		15,140,435
Series 2014-FL5, Class KH2, 1 mo. USD LIBOR + 4.50%, 6.42%, 08/15/31 (a),(b),(d)		10,471,518		8,385,776
Commercial Mortgage Trust,
Series 2014-LC17, Class C, 4.71%, 10/10/47 (b)		1,572,000		1,518,223
Series 2014-LC17, Class D, 3.69%, 10/10/47 (a),(c)		1,940,000		1,529,511
Commercial Mortgage Trust, Series 2014-UBS5, Class D, 3.50%, 09/10/47 (a),(c),(d)		4,395,000		3,513,890
Commercial Mortgage Trust,
Series 2014-UBS6, Class D, 4.11%, 12/10/47 (a),(b)		658,000		548,376
Series 2014-UBS6, Class E, 4.61%, 12/10/47 (a),(b),(c),(d)		9,693,000		6,615,043
Commercial Mortgage Trust,
Series 2015-CR22, Class E, 3.00%, 03/10/48 (a),(d)		12,398,000		7,852,441
Series 2015-CR22, Class F, 3.00%, 03/10/48 (a),(d)		7,294,000		3,922,524
Commercial Mortgage Trust,
Series 2015-CR23, Class CMD, 3.81%, 05/10/48 (a),(b),(c),(d)		19,957,000		19,743,123
Series 2015-CR23, Class CME, 3.81%, 05/10/48 (a),(b),(c),(d)		15,044,000		14,651,364
Series 2015-CR23, Class E, 3.23%, 05/10/48 (a)		5,489,000		3,843,156
Series 2015-CR23, Class F, 4.39%, 05/10/48 (a),(b)		1,170,000		764,615
Commercial Mortgage Trust, Series 2015-CR24, Class D, 3.46%, 08/10/48 (b),(c)		6,434,000		5,241,881
Commercial Mortgage Trust, Series 2015-CR25, Class D, 3.95%, 08/10/48 (b),(c),(d)		6,707,000		5,525,078

See Notes to Consolidated Financial Statements.

3

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

	Principal Amount		Value
Commercial Mortgage Trust, Series 2015-CR26, Class D, 3.64%, 10/10/48 (b),(c),(d)	$	3,739,000	$	2,945,978
Commercial Mortgage Trust,
Series 2015-LC21, Class D, 4.45%, 07/10/48 (b),(c)		1,409,000		1,230,559
Series 2015-LC21, Class E, 3.25%, 07/10/48 (a),(d)		5,936,000		3,994,024
Commercial Mortgage Trust, Series 2016-CD1, Class D, 2.90%, 08/10/49 (a),(b),(c),(d)		1,456,000		1,151,474
Commercial Mortgage Trust, Series 2016-COR1, Class D, 3.54%, 10/10/49 (a),(b),(c)		8,294,000		6,461,671
Commercial Mortgage Trust, Series 2016-DC2, Class D, 4.05%, 02/10/49 (a),(b)		877,000		719,934
CoreVest American Finance Trust, Series 2017-2 SEQ, Class M, 5.62%, 12/25/27 (a)		700,000		728,110
Credit Suisse Commercial Mortgage Trust, Series 2007-C2, Class B, 5.90%, 01/15/49 (a),(b)		1,746,500		1,768,822
Credit Suisse Commercial Mortgage Trust, Series 2007-C3, Class AJ, 5.80%, 06/15/39 (b)		55,181		41,040
Credit Suisse First Boston Mortgage Securities Corp., Series 2005-C5, Class G, 5.10%, 08/15/38 (a),(b),(d)		4,764,000		4,592,828
Credit Suisse Mortgage Trust, Series 2006-C5, Class AJ, 5.37%, 12/15/39 (d)		6,451,546		5,130,392
CSAIL Commercial Mortgage Trust,
Series 2017-CX10, Class UESC, 4.38%, 10/15/32 (a),(b),(c)		2,824,000		2,783,600
Series 2017-CX10, Class UESD, 4.38%, 10/15/32 (a),(b),(c)		15,625,500		15,104,246
Federal Home Loan Mortgage Corp., Series K077, Class X3, 2.23%, 06/25/46 (b)		16,484,809		2,773,579
Federal Home Loan Mortgage Corp., Series KBX1, Class X1, 0.20%, 01/25/26 (b),(c)		667,207,000		5,075,244
FREMF Mortgage Trust, Series 2016-K60, Class D, 0.00%, 12/25/49 (a),(d)		41,179,337		20,853,467
FREMF Mortgage Trust, Series 2016-KF16, Class B, 1 mo. USD LIBOR + 6.64%, 8.64%, 03/25/26 (a),(b),(c)		1,464,786		1,577,900
FREMF Mortgage Trust, Series 2016-KF25, Class B, 1 mo. USD LIBOR + 5.00%, 7.00%, 09/25/23 (a),(b),(c)		3,982,076		4,206,624
FREMF Mortgage Trust, Series 2017-KGL1, Class BFL, 1 mo. USD LIBOR + 2.50%, 4.50%, 10/25/27 (a),(b),(c),(d)		18,864,000		18,884,520
FREMF Mortgage Trust, Series 2017-KGX1, Class BFX, 3.71%, 10/25/27 (a),(b),(c),(d)		15,725,000		14,040,994
FREMF Mortgage Trust, Series 2018-K154, Class B, 4.16%, 11/25/32 (a),(b)		3,110,000		2,835,773
FREMF Mortgage Trust, Series 2018-K155, Class B, 4.16%, 04/25/33 (a),(b)		2,849,000		2,275,258
FREMF Mortgage Trust, Series 2018-KF42, Class B, 1 mo. USD LIBOR + 2.20%, 4.20%, 12/25/24 (a),(b)		1,863,758		1,871,167
FREMF Mortgage Trust, Series 2018-KF44, Class B, 1 mo. USD LIBOR + 2.15%, 4.15%, 02/25/25 (a),(b)		2,329,157		2,340,532

See Notes to Consolidated Financial Statements.

4

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

	Principal Amount		Value
GCCFC Commercial Mortgage Trust, Series 2007-GG11, Class D, 6.18%, 12/10/49 (b)	$	1,455,642	$	1,453,444
GE Commercial Mortgage Corp., Series 2005-C4, Class AJ, 5.94%, 11/10/45 (b),(d)		4,111,781		4,171,998
GMAC Commercial Mortgage Securities, Inc., Series 2006-C1, Class AJ, 5.35%, 11/10/45 (b)		850,668		782,421
GRACE Mortgage Trust, Series 2014-GRCE, Class G, 3.71%, 06/10/28 (a),(b),(c),(d)		9,295,000		9,044,809
GS Mortgage Securities Corp. II, Series 2015-GC30, Class D, 3.38%, 05/10/50		5,107,000		4,098,405
GS Mortgage Securities Trust, Series 2006-CC1, Class A, 5.65%, 03/21/46 (a),(b),(d)		3,657,359		3,157,474
GS Mortgage Securities Trust, Series 2006-GG8, Class B, 5.66%, 11/10/39 (d)		2,297,000		627,170
GS Mortgage Securities Trust, Series 2007-GG10, Class AM, 5.98%, 08/10/45 (b),(c)		4,243,467		4,281,567
GS Mortgage Securities Trust, Series 2012-GCJ9, Class E, 4.91%, 11/10/45 (a),(b),(c)		10,250,422		9,044,628
GS Mortgage Securities Trust, Series 2014-GC20, Class D, 5.02%, 04/10/47 (a),(b),(c)		3,241,000		2,663,154
GS Mortgage Securities Trust,
Series 2014-GSFL, Class D, 1 mo. USD LIBOR + 3.90%, 5.34%, 07/15/31 (a),(b),(c)		3,723,591		3,734,410
Series 2014-GSFL, Class E, 1 mo. USD LIBOR + 5.95%, 5.34%, 07/15/31 (a),(b),(c)		8,883,000		8,878,218
GS Mortgage Securities Trust, Series 2017-SLP, Class E, 4.74%, 10/10/32 (a),(b),(c)		9,592,000		9,329,216
Hilton Orlando Trust,
Series 2018-ORL, Class E, 1 mo. USD LIBOR + 2.65%, 4.72%, 12/15/34 (a),(b),(c),(d)		11,378,000		11,420,588
Series 2018-ORL, Class F, 1 mo. USD LIBOR + 3.65%, 5.72%, 12/15/34 (a),(b),(c),(d)		10,458,000		10,500,887
Hilton USA Trust, Series 2016-HHV, Class F, 4.33%, 11/05/38 (a),(b),(c),(d)		11,994,000		10,700,989
Hilton USA Trust, Series 2016-SFP, Class F, 6.16%, 11/05/35 (a),(c)		3,415,000		3,456,764
Home Partners of America Trust, Series 2017-1, Class F, 1 mo. USD LIBOR + 3.54%, 5.62%, 07/17/34 (a),(b)		882,000		888,347
InTown Hotel Portfolio Trust, Series 2018-STAY, Class E, 1 mo. USD LIBOR + 3.10%, 5.17%, 01/15/33 (a),(b),(c),(d)		13,602,000		13,624,069
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2016-ASH, Class F, 1 mo. USD LIBOR + 6.21%, 8.28%, 10/15/34 (a),(b)		7,045,307		7,071,226
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2018-ASH8, Class F, 1 mo. USD LIBOR + 4.00%, 6.07%, 02/15/35 (a),(b),(c),(d)		5,267,000		5,279,326

See Notes to Consolidated Financial Statements.

5

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

	Principal Amount		Value
JPMorgan Chase Commercial Mortgage Securities Corp., Series 2018-LAQ, Class E, 1 mo. USD LIBOR + 3.00%, 5.00%, 06/15/32 (a),(b)	$	7,254,000	$	7,257,675
JPMorgan Chase Commercial Mortgage Securities Trust,
Series 2005-LDP1, Class G, 6.01%, 03/15/46 (a),(b)		1,847,321		1,878,376
Series 2005-LDP1, Class H, 6.01%, 03/15/46 (a),(b)		1,264,167		1,105,586
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2005-LDP5, Class H, 5.89%, 12/15/44 (a),(b)		1,593,000		1,494,269
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP8, Class E, 5.65%, 05/15/45 (a),(b)		1,011,848		1,013,315
JPMorgan Chase Commercial Mortgage Securities Trust,
Series 2006-LDP9 SEQ, Class AJ, 5.41%, 05/15/47 (d)		41,197,000		29,231,616
Series 2006-LDP9 SEQ, Class AM, 5.37%, 05/15/47 (d)		1,714,523		1,718,423
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2007-CB18, Class AJ, 5.50%, 06/12/47 (b),(c)		11,884,846		9,879,649
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2007-LDPX, Class AM, 5.46%, 01/15/49 (b),(c)		1,813,523		1,814,769
JPMorgan Chase Commercial Mortgage Securities Trust,
Series 2015-SGP, Class A, 1 mo. USD LIBOR + 1.70%, 3.77%, 07/15/36 (a),(b)		258,236		258,976
Series 2015-SGP, Class D, 1 mo. USD LIBOR + 4.50%, 6.57%, 07/15/36 (a),(b),(c)		30,786,000		31,001,250
Series 2015-SGP, Class F, 1 mo. USD LIBOR + 5.38%, 7.45%, 07/15/36 (a),(b)		2,943,000		2,931,593
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2016-JP2, Class D, 3.94%, 08/15/49 (a),(b),(c)		3,859,000		3,291,780
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2016-JP3, Class D, 3.62%, 08/15/49 (a),(b),(c),(d)		1,413,000		1,173,960
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2016-JP4, Class D, 3.60%, 12/15/49 (a),(b),(c),(d)		4,056,000		3,368,636
JPMorgan Chase Commercial Mortgage Securities Trust, Series 2018-ASH8, Class E, 1 mo. USD LIBOR + 3.00%, 5.07%, 02/15/35 (a),(b),(c),(d)		8,921,000		8,939,989
JPMBB Commercial Mortgage Securities Trust, Series 2013-C17, Class D, 5.04%, 01/15/47 (a),(b),(c)		2,052,000		1,935,133
JPMBB Commercial Mortgage Securities Trust, Series 2015-C29, Class D, 3.82%, 05/15/48 (b),(c)		2,550,000		2,063,042
JPMBB Commercial Mortgage Securities Trust,
Series 2015-C31, Class D, 4.27%, 08/15/48 (b)		213,000		166,282
Series 2015-C31, Class E, 4.77%, 08/15/48 (a),(b),(d)		4,661,000		3,154,048
JPMDB Commercial Mortgage Securities Trust, Series 2016-C4, Class D, 3.22%, 12/15/49 (a),(b),(c),(d)		1,305,000		1,039,980
LB-UBS Commercial Mortgage Trust, Series 2004-C6, Class J, 6.44%, 08/15/36 (a),(b)		737,413		739,502

See Notes to Consolidated Financial Statements.

6

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

	Principal Amount		Value
LB-UBS Commercial Mortgage Trust,
Series 2005-C1, Class H, 5.95%, 02/15/40 (a),(b)	$	1,062,000	$	1,064,748
Series 2005-C1, Class J, 6.20%, 02/15/40 (a),(b)		474,713		350,383
LB-UBS Commercial Mortgage Trust, Series 2006-C3, Class F, 5.88%, 03/15/39 (b)		2,688,154		2,610,414
LB-UBS Commercial Mortgage Trust, Series 2006-C7, Class AJ, 5.41%, 11/15/38 (c)		6,439,217		4,941,008
Lone Star Portfolio Trust,
Series 2015-LSP, Class A1A2, 1 mo. USD LIBOR + 1.80%, 3.87%, 09/15/28 (a),(b),(c)		1,175,227		1,176,672
Series 2015-LSP, Class D, 1 mo. USD LIBOR + 4.00%, 6.07%, 09/15/28 (a),(b)		821,653		825,638
LSTAR Commercial Mortgage Trust, Series 2017-5, Class C, 4.87%, 03/10/50 (a),(b),(c),(d)		3,258,000		2,996,270
Merrill Lynch Mortgage Trust, Series 2004-KEY2, Class F, 5.30%, 08/12/39 (a),(b)		242,880		77,645
Merrill Lynch Mortgage Trust, Series 2005-CIP1, Class D, 5.79%, 07/12/38 (b),(d)		6,209,991		6,336,212
Merrill Lynch Mortgage Trust, Series 2007-C1, Class AJ, 5.99%, 06/12/50 (b),(d)		1,405,689		928,809
ML-CFC Commercial Mortgage Trust, Series 2007-5, Class AJFL, 5.45%, 08/12/48 (a),(b),(d)		3,633,363		2,690,166
ML-CFC Commercial Mortgage Trust, Series 2007-5 SEQ, Class AJ, 5.45%, 08/12/48 (b)		4,124,387		3,069,623
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2012-C5, Class G, 4.50%, 08/15/45 (a),(c)		6,380,000		5,709,835
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2013-C12, Class E, 4.92%, 10/15/46 (a),(b),(c)		4,594,532		3,809,442
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2013-C7, Class F, 4.39%, 02/15/46 (a),(b),(c)		10,844,953		7,983,249
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2014-C15, Class E, 5.05%, 04/15/47 (a),(b),(c),(d)		4,000,000		3,140,784
Morgan Stanley Bank of America Merrill Lynch Trust,
Series 2014-C19, Class E, 3.25%, 12/15/47 (a),(c)		2,366,000		1,587,789
Series 2014-C19, Class LNC3, 4.75%, 12/15/46 (a),(c),(d)		8,128,476		8,204,984
Series 2014-C19, Class LNC4, 4.75%, 12/15/46 (a),(c),(d)		6,633,685		6,467,682
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2015-C22, Class D, 4.38%, 04/15/48 (a),(b)		4,129,000		3,517,370
Morgan Stanley Bank of America Merrill Lynch Trust, Series 2017-C34, Class D, 2.70%, 11/15/52 (a)		688,000		500,552
Morgan Stanley Capital I Trust, Series 2005-IQ10, Class F, 5.81%, 09/15/42 (a),(b)		2,375,933		2,320,649
Morgan Stanley Capital I Trust, Series 2006-HQ9, Class F, 5.92%, 07/12/44 (b),(d)		3,356,460		2,475,037

See Notes to Consolidated Financial Statements.

7

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

	Principal Amount		Value
Morgan Stanley Capital I Trust,
Series 2006-T23, Class D, 6.32%, 08/12/41 (a),(b),(c),(d)	$	4,947,000	$	5,056,596
Series 2006-T23, Class E, 6.32%, 08/12/41 (a),(b)		1,328,000		1,244,850
Morgan Stanley Capital I Trust, Series 2007-IQ15, Class B, 6.28%, 06/11/49 (a),(b),(d)		8,951,000		9,004,529
Morgan Stanley Capital I Trust, Series 2016-UB11, Class D, 3.50%, 08/15/49 (a),(b),(c),(d)		2,077,000		1,736,931
Natixis Commercial Mortgage Securities Trust,
Series 2018-285M, Class E, 3.92%, 11/15/32 (a),(b),(c),(d)		7,044,000		6,722,370
Series 2018-285M, Class F, 3.92%, 11/15/32 (a),(b),(c),(d)		6,259,000		5,838,853
Natixis Commercial Mortgage Securities Trust,
Series 2018-FL1, Class WAN1, 1 mo. USD LIBOR + 2.75%, 4.67%, 06/15/35 (a),(b)		311,000		311,596
Series 2018-FL1, Class WAN2, 1 mo. USD LIBOR + 3.75%, 5.67%, 06/15/35 (a),(b)		750,000		751,360
Natixis Commercial Mortgage Securities Trust, Series 2018-RIVA, Class E, 1 mo. USD LIBOR + 2.74%, 4.81%, 02/15/33 (a),(b),(c)		2,619,000		2,626,099
Natixis Commercial Mortgage Securities Trust, Series 2018-TECH, Class E, 1 mo. USD LIBOR + 2.25%, 4.32%, 11/15/34 (a),(b),(c)		2,916,000		2,920,012
SG Commercial Mortgage Securities Trust, Series 2016-C5, Class D, 5.01%, 10/10/48 (a),(b),(d)		1,477,000		1,287,402
Taurus, Series 2017-UK2, Class E, 3 mo. GBP LIBOR + 3.65%, 4.27%, 11/17/27 (b),(e)	£	2,834,000		3,772,971
Tharaldson Hotel Portfolio Trust, Series 2018-THL, Class E, 1 mo. USD LIBOR + 3.18%, 5.23%, 11/11/34 (a),(b),(c)	$	12,559,730		12,600,249
Tricon American Homes Trust, Series 2017-SFR2, Class F, 5.10%, 01/17/36 (a),(d)		4,680,000		4,723,515
VNO Mortgage Trust, Series 2016-350P, Class E, 4.03%, 01/10/35 (a),(b),(c),(d)		4,939,000		4,561,272
Wachovia Bank Commercial Mortgage Trust, Series 2007-C30, Class C, 5.48%, 12/15/43 (b),(d)		3,776,000		3,800,745
Wells Fargo Commercial Mortgage Trust, Series 2015-C29, Class D, 4.37%, 06/15/48 (b),(c),(d)		4,072,000		3,547,869
Wells Fargo Commercial Mortgage Trust, Series 2016-LC25, Class D, 3.14%, 12/15/59 (a),(c)		5,964,000		4,579,301
WFRBS Commercial Mortgage Trust, Series 2013-C18, Class D, 4.81%, 12/15/46 (a),(b),(c),(d)		6,395,000		5,866,392
WFRBS Commercial Mortgage Trust, Series 2014-C22, Class D, 4.06%, 09/15/57 (a),(b),(c)		1,588,000		1,274,484
WFRBS Commercial Mortgage Trust, Series 2014-C25, Class D, 3.80%, 11/15/47 (a),(b),(d)		1,287,000		1,068,131

See Notes to Consolidated Financial Statements.

8

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

	Principal Amount		Value
Worldwide Plaza Trust,
Series 2017-WWP, Class E, 3.72%, 11/10/36 (a),(b),(c)	$	2,972,000	$	2,684,314
Series 2017-WWP, Class F, 3.72%, 11/10/36 (a),(b),(c)		12,001,000		10,393,492
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (COST $792,788,494)				798,507,453
RESIDENTIAL MORTGAGE-BACKED SECURITIES — 17.3%
Civic Mortgage LLC, Series 2018-1, Class A2, 4.86%, 06/25/22 (a)		589,240		588,187
Credit Suisse European Mortgage Capital Ltd.,
Series 2015-1HWA, Class A, 3 mo. EURIBOR + 2.75%, 2.75%, 04/20/20 (a),(b),(c)	€	106,724,502		123,983,214
Series 2015-1HWA, Class AX, 0.25%, 04/20/20 (a)	€	106,724,501		292,825
Federal Home Loan Mortgage Corp., Series 2018-SPI2, Class M2, 3.82%, 05/25/48 (a),(b)	$	7,646,000		7,018,104
Federal National Mortgage Association,
Series 2018-C03, Class 1B1, 1 mo. USD LIBOR + 3.75%, 5.84%, 10/25/30 (b)		3,674,000		3,629,950
Series 2018-C03, Class 1M2, 1 mo. USD LIBOR + 2.15%, 4.24%, 10/25/30 (b)		5,974,000		5,940,871
Federal National Mortgage Association, Series 2018-C04, Class 2M2, 1 mo. USD LIBOR + 2.55%, 4.65%, 12/25/30 (b)		2,725,000		2,728,805
Preston Ridge Partners Mortgage LLC, Series 2017-3A, Class A2, 5.00%, 11/25/22 (a),(b)		5,701,000		5,606,917
Preston Ridge Partners Mortgage LLC, Series 2018-1A, Class A2, 5.00%, 04/25/23 (a),(b)		1,454,000		1,433,244
Trinidad Mortgage Securities PLC,
Series 2018-1, Class C, 3 mo. GBP LIBOR + 1.60%, 1.00%, 01/24/59 (b),(e)	£	2,349,000		3,065,638
Series 2018-1, Class D, 3 mo. GBP LIBOR + 2.00%, 1.00%, 01/24/59 (b),(e)	£	2,947,000		3,890,778
Series 2018-1, Class E, 3 mo. GBP LIBOR + 2.65%, 1.00%, 01/24/59 (b),(e)	£	2,315,000		3,056,380
Vericrest Opportunity Loan Trust LLC, Series 2017-NPL9 SEQ, Class A2, 4.63%, 09/25/47 (a)	$	2,773,000		2,752,481
TOTAL RESIDENTIAL MORTGAGE-BACKED SECURITIES (COST $166,467,831)				163,987,394
INTEREST ONLY COMMERCIAL MORTGAGE-BACKED SECURITIES — 0.7%
Commercial Mortgage Trust, Series 2010-C1, Class XWA, 2.08%, 07/10/46 (a),(b),(c)		1,180,190		36,836

See Notes to Consolidated Financial Statements.

9

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

	Principal Amount		Value
CSAIL Commercial Mortgage Trust, Series 2017-CX10, Class UESX, 0.20%, 10/15/32 (a),(b)	$	92,814,500	$	491,351
FREMF Mortgage Trust,
Series 2016-K60, Class X2A, 0.10%, 12/25/49 (a)		852,270,571		4,431,722
Series 2016-K60, Class X2B, 0.10%, 12/25/49 (a)		218,008,797		1,195,451
GS Mortgage Securities Corp. II, Series 2017-SLP, Class XB, 0.61%, 10/10/32 (a),(b),(d)		35,804,000		688,833
TOTAL INTEREST ONLY COMMERCIAL MORTGAGE-BACKED SECURITIES (COST $6,844,199)				6,844,193
COLLATERALIZED DEBT OBLIGATIONS — 0.4%
Cress Ltd., Series 2008, Class F, 2.08%, 12/21/42 (b),(f)		12,398,721		250,000
Nomura CRE CDO Ltd.,
Series 2007-2A, Class D, 3 mo. USD LIBOR + ..45%, 2.78%, 05/21/42 (a),(b),(d)		6,741,673		3,902,789
Series 2007-2A, Class E, 3 mo. USD LIBOR + ..50%, 2.83%, 05/21/42 (a),(b)		5,558,110		13,617
Series 2007-2A, Class F, 3 mo. USD LIBOR + ..60%, 2.93%, 05/21/42 (a),(b)		7,574,242		18,557
TOTAL COLLATERALIZED DEBT OBLIGATIONS (COST $3,826,212)				4,184,963
MEZZANINE DEBT — 15.8%
BHMS Mortgage Trust, Series 2014-MZ, Class M, 7.61%, 07/05/33 (a),(b),(d)		23,003,000		22,734,491
CGBAM Commercial Mortgage Trust, Series 2015-SMRT, Class MZ, 8.21%, 04/10/28 (a),(d)		102,500,000		106,814,368
Simply Self Storage, Mezzanine Loan, 6.25%, 09/06/21		19,710,000		19,958,346
TOTAL MEZZANINE DEBT (COST $145,646,534)				149,507,205
BANK LOAN — 5.9%
Casablanca US Holdings, Inc., 2018 1st Lien Term Loan, 2 mo. LIBOR + 4.00%, 6.10%, 03/25/25 (b)		9,949,065		9,899,320
Diamond Resorts Corporation, 2018 Term Loan B, 0.00%, 09/02/23 (g)		2,180,000		2,173,419
Invitation Homes Operating Partnership LP, Term Loan A, 1 mo. LIBOR + 1.80%, 3.89%, 02/06/22 (b)		6,742,000		6,586,091
Quality Care Properties, Inc., 1st Lien Term Loan, 0.00%, 10/31/22 (g)		36,975,550		37,114,209
TOTAL BANK LOAN (COST $55,830,381)				55,773,039

See Notes to Consolidated Financial Statements.

10

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

	Principal Amount		Value
HIGH YIELD BONDS & NOTES — 4.6%
Boyne USA, Inc., 7.25%, 05/01/25 (a),(c)	$	3,448,000	$	3,590,326
CPUK Finance Ltd.,
4.25%, 02/28/47 (g)	£	22,125,000		29,347,345
4.88%, 02/28/47 (g)	£	2,614,000		3,463,634
Diamond Resorts, Inc., 7.75%, 09/01/23 (a),(d)	$	6,268,000		6,553,977
TOTAL HIGH YIELD BONDS & NOTES (COST $41,837,817)				42,955,282
	Shares		Value
COMMON STOCK — 0.6%
Specialty Finance — 0.6%
TPG RE Finance Trust, Inc.		283,825		5,767,324
TOTAL COMMON STOCK (COST $5,676,500)				5,767,324
TOTAL LONG-TERM INVESTMENTS (COST $1,218,917,968)				1,227,526,853
	Principal Amount		Value
SHORT-TERM INVESTMENTS — 3.9%
MONEY MARKET FUND — 3.9%
JPMorgan U.S. Treasury Money Market Plus Fund, Institutional Class, 2.08% (h)	$	36,668,689	$	36,668,689
TOTAL SHORT-TERM INVESTMENTS (COST $36,668,689)				36,668,689
TOTAL INVESTMENTS IN SECURITIES — 133.4% (COST $1,255,586,657)				1,264,195,542
SECURITIES SOLD SHORT — (16.7)%
FOREIGN GOVERNMENT OBLIGATIONS — (2.5)%
United Kingdom Gilt, 0.50%, 07/22/22 (e)	£	15,700,000		(20,409,313	)
United Kingdom Gilt, 2.00%, 09/07/25 (e)	£	2,091,000		(2,927,000	)
TOTAL FOREIGN GOVERNMENT OBLIGATIONS (PROCEEDS $22,970,087)				(23,336,313	)
U.S. TREASURY NOTES — (14.2)%
U.S. Treasury Notes, 1.25%, 03/31/21	$	11,000,000		(10,605,547	)
U.S. Treasury Notes, 2.00%, 10/31/22		15,000,000		(14,560,547	)
U.S. Treasury Notes, 2.00%, 11/15/26		3,000,000		(2,809,687	)
U.S. Treasury Notes, 2.13%, 11/30/24		7,000,000		(6,718,907	)
U.S. Treasury Notes, 2.25%, 08/15/27		67,500,000		(64,198,832	)

See Notes to Consolidated Financial Statements.

11

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

	Principal Amount		Value
U.S. Treasury Notes, 2.25%, 12/31/24	$	5,000,000	$	(4,833,594	)
U.S. Treasury Notes, 2.25%, 02/15/21		6,000,000		(5,947,031	)
U.S. Treasury Notes, 2.75%, 05/31/23		13,000,000		(13,012,187	)
U.S. Treasury Notes, 2.88%, 05/15/28		12,000,000		(12,015,000	)
TOTAL U.S. TREASURY NOTES (PROCEEDS $138,033,880)				(134,701,332	)
TOTAL SECURITIES SOLD SHORT (PROCEEDS $161,003,967)				(158,037,645	)
Other Assets and Liabilities (i) — (16.7)%				(158,071,352	)
Net Assets — 100.0%			$	948,086,545

(a) Security is exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. Security may only be sold to qualified institutional buyers unless registered under the Securities Act of 1933, as amended, or otherwise exempt from registration.

(b) Variable/Floating interest rate security. Certain variable/floating interest rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above. Rate presented is as of June 30, 2018.

(c) All or a portion of this security is pledged as collateral in connection with reverse repurchase agreements.

(d) All or a portion of this security is pledged as collateral for derivative financial instruments.

(e) Security is exempt from registration pursuant to Regulation S under the Securities Act of 1933, as amended. Security may only be offered or sold outside of the Unites States unless registered under the Securities Act of 1933, as amended, or otherwise exempt from registration.

(f) Security is valued using significant unobservable inputs.

(g) All or a portion of the security represents an unsettled loan commitment at June 30, 2018 where the rate will be determined at time of settlement.

(h) Rate disclosed, the 7 day net yield, is as of June 30, 2018.

(i) Assets, other than investments in securities, less liabilities other than securities sold short.

Reverse Repurchase Agreements Outstanding at June 30, 2018

Counterparty	Interest Rate	Trade Date	Maturity Date		Face Value		Face Value Including Accrued Interest
Morgan Stanley Bank, N.A.	3.22%	06/04/18		09/04/18	$	3,166,000	$	3,173,649
Morgan Stanley Bank, N.A.	3.22%	06/04/18		09/04/18		2,521,000		2,527,091
Morgan Stanley Bank, N.A.	3.26%	05/23/18		07/23/18		9,319,000		9,351,927
Morgan Stanley Bank, N.A.	3.26%	06/14/18		09/06/18		2,316,000		2,319,570
Morgan Stanley Bank, N.A.	3.26%	06/06/18		09/06/18		4,129,000		4,138,359
Morgan Stanley Bank, N.A.	3.29%	04/12/18		07/12/18		10,545,000		10,622,073
Morgan Stanley Bank, N.A.	3.30%	04/16/18		07/16/18		9,012,000		9,074,740
Morgan Stanley Bank, N.A.	3.32%	06/05/18		09/05/18		2,095,000		2,100,020
Morgan Stanley Bank, N.A.	3.32%	06/04/18		09/04/18		4,932,000		4,944,285

See Notes to Consolidated Financial Statements.

12

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

Counterparty	Interest Rate	Trade Date	Maturity Date		Face Value		Face Value Including Accrued Interest
Morgan Stanley Bank, N.A.	3.33%	05/16/18		08/16/18	$	2,514,000	$	2,524,697
Morgan Stanley Bank, N.A.	3.33%	05/21/18		08/21/18		5,939,000		5,961,532
Morgan Stanley Bank, N.A.	3.33%	06/13/18		09/13/18		4,546,000		4,553,575
Morgan Stanley Bank, N.A.	3.33%	06/19/18		09/19/18		4,037,000		4,041,476
Morgan Stanley Bank, N.A.	3.33%	06/19/18		09/19/18		3,950,000		3,954,379
Morgan Stanley Bank, N.A.	3.34%	05/15/18		08/15/18		7,106,000		7,137,009
Morgan Stanley Bank, N.A.	3.35%	04/17/18		07/17/18		11,553,000		11,633,698
RBC (Barbados) Trading Bank Corporation	3.02%	04/27/18		07/27/18		1,775,000		1,784,665
RBC (Barbados) Trading Bank Corporation	3.02%	04/27/18		07/27/18		3,259,000		3,276,745
RBC (Barbados) Trading Bank Corporation	3.03%	05/16/18		08/15/18		38,000		38,147
RBC (Barbados) Trading Bank Corporation	3.05%	05/18/18		07/17/18		2,872,000		2,882,716
RBC (Barbados) Trading Bank Corporation	3.27%	06/15/18		09/04/18		1,221,000		1,222,775
RBC (Barbados) Trading Bank Corporation	3.27%	06/04/18		09/04/18		1,822,000		1,826,470
RBC (Barbados) Trading Bank Corporation	3.27%	06/04/18		09/04/18		5,004,000		5,016,277
RBC (Barbados) Trading Bank Corporation	3.27%	06/04/18		09/04/18		4,699,000		4,710,529
RBC (Barbados) Trading Bank Corporation	3.28%	06/19/18		09/19/18		1,913,000		1,915,089
RBC (Barbados) Trading Bank Corporation	3.28%	06/19/18		09/19/18		2,478,000		2,480,706
RBC (Barbados) Trading Bank Corporation	3.28%	06/19/18		09/19/18		2,489,000		2,491,718
RBC (Barbados) Trading Bank Corporation	3.28%	06/19/18		09/19/18		3,041,000		3,044,321
RBC (Barbados) Trading Bank Corporation	3.28%	06/19/18		09/19/18		3,065,000		3,068,347
RBC (Barbados) Trading Bank Corporation	3.29%	05/15/18		08/15/18		412,000		413,771
RBC (Barbados) Trading Bank Corporation	3.31%	06/06/18		09/06/18		505,000		506,162
RBC (Barbados) Trading Bank Corporation	3.31%	06/06/18		09/06/18		1,494,000		1,497,438
RBC (Barbados) Trading Bank Corporation	3.31%	06/06/18		09/06/18		3,005,000		3,011,915
RBC (Barbados) Trading Bank Corporation	3.31%	06/06/18		09/06/18		3,653,000		3,661,406

See Notes to Consolidated Financial Statements.

13

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

Counterparty	Interest Rate	Trade Date	Maturity Date		Face Value		Face Value Including Accrued Interest
RBC (Barbados) Trading Bank Corporation	3.31%	06/06/18		09/06/18	$	4,039,000	$	4,048,295
RBC (Barbados) Trading Bank Corporation	3.31%	06/06/18		09/06/18		4,287,000		4,296,866
RBC (Barbados) Trading Bank Corporation	3.32%	06/20/18		09/20/18		831,000		831,844
RBC (Barbados) Trading Bank Corporation	3.32%	06/20/18		09/20/18		926,000		926,941
RBC (Barbados) Trading Bank Corporation	3.32%	06/20/18		09/20/18		934,000		934,949
RBC (Barbados) Trading Bank Corporation	3.32%	06/20/18		09/20/18		943,000		943,958
RBC (Barbados) Trading Bank Corporation	3.32%	06/20/18		09/20/18		1,009,000		1,010,025
RBC (Barbados) Trading Bank Corporation	3.32%	06/20/18		09/20/18		1,367,000		1,368,389
RBC (Barbados) Trading Bank Corporation	3.32%	06/20/18		09/20/18		1,656,000		1,657,682
RBC (Barbados) Trading Bank Corporation	3.33%	05/16/18		08/15/18		451,000		452,919
RBC (Barbados) Trading Bank Corporation	3.33%	05/16/18		08/15/18		1,566,000		1,572,663
RBC (Barbados) Trading Bank Corporation	3.33%	06/19/18		09/19/18		1,902,000		1,904,109
RBC (Barbados) Trading Bank Corporation	3.33%	06/19/18		09/19/18		2,507,000		2,509,779
RBC (Barbados) Trading Bank Corporation	3.33%	06/13/18		09/13/18		3,052,000		3,057,086
RBC (Barbados) Trading Bank Corporation	3.33%	06/19/18		09/19/18		5,235,000		5,240,804
RBC (Barbados) Trading Bank Corporation	3.33%	06/19/18		09/19/18		5,498,000		5,504,095
RBC (Barbados) Trading Bank Corporation	3.33%	06/13/18		09/13/18		6,535,000		6,545,889
RBC (Barbados) Trading Bank Corporation	3.33%	06/19/18		09/19/18		7,276,000		7,284,067
RBC (Barbados) Trading Bank Corporation	3.33%	05/21/18		08/21/18		8,361,000		8,392,721
RBC (Barbados) Trading Bank Corporation	3.33%	06/19/18		09/19/18		9,361,000		9,371,378
RBC (Barbados) Trading Bank Corporation	3.34%	05/15/18		08/15/18		8,411,000		8,447,704
RBC (Barbados) Trading Bank Corporation	3.35%	04/17/18		07/17/18		5,902,000		5,943,226

See Notes to Consolidated Financial Statements.

14

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

Counterparty	Interest Rate	Trade Date	Maturity Date		Face Value		Face Value Including Accrued Interest
RBC (Barbados) Trading Bank Corporation	3.36%	04/24/18		07/24/18	$	3,742,000	$	3,765,744
RBC (Barbados) Trading Bank Corporation	3.36%	06/06/18		09/06/18		1,087,000		1,089,539
RBC (Barbados) Trading Bank Corporation	3.38%	05/21/18		08/21/18		4,042,000		4,057,565
RBC (Barbados) Trading Bank Corporation	3.38%	06/19/18		09/19/18		11,214,000		11,226,619
RBC (Barbados) Trading Bank Corporation	3.43%	05/16/18		08/15/18		7,295,000		7,326,972
RBC (Barbados) Trading Bank Corporation	3.46%	06/06/18		09/06/18		3,385,000		3,393,142
RBC (Barbados) Trading Bank Corporation	3.50%	03/29/18		09/28/18		25,768,000		26,003,692
RBC (Barbados) Trading Bank Corporation	3.50%	06/15/18		12/14/18		5,303,000		5,311,249
RBC (Barbados) Trading Bank Corporation	3.76%	05/18/18		05/17/19		6,242,000		6,270,697
RBC Europe Limited	0.90%	03/23/18		09/21/18		40,251,841		40,354,729
RBC Europe Limited	0.93%	06/18/18		09/21/18		5,618,151		5,620,022
RBC Europe Limited	0.93%	03/21/18		09/21/18		60,479,015		60,641,875
Royal Bank of Canada	3.05%	04/17/18		07/17/18		4,613,000		4,642,339
Royal Bank of Canada	3.28%	06/18/18		09/18/18		11,827,000		11,841,028
Royal Bank of Canada	3.30%	04/16/18		07/16/18		6,953,000		7,001,405
Royal Bank of Canada	3.30%	04/16/18		07/16/18		11,899,000		11,981,838
Royal Bank of Canada	3.31%	04/12/18		07/12/18		16,721,000		16,843,956
Royal Bank of Canada	3.32%	06/04/18		09/04/18		2,463,000		2,469,135
Royal Bank of Canada	3.32%	06/04/18		09/04/18		3,880,000		3,889,665
Royal Bank of Canada	3.33%	05/25/18		08/21/18		2,195,000		2,202,515
Royal Bank of Canada	3.33%	06/18/18		09/18/18		8,388,000		8,398,101
Royal Bank of Canada	3.33%	06/18/18		09/18/18		8,555,000		8,565,302
Royal Bank of Canada	3.33%	06/19/18		09/19/18		2,777,000		2,780,079
Royal Bank of Canada	3.33%	06/19/18		09/19/18		2,778,000		2,781,080
Royal Bank of Canada	3.36%	04/20/18		07/20/18		15,652,000		15,757,140
Royal Bank of Canada	3.38%	05/21/18		08/21/18		7,885,000		7,915,364
Royal Bank of Canada	3.38%	06/19/18		09/19/18		3,698,000		3,702,161
Royal Bank of Canada	3.53%	05/18/18		08/17/18		1,171,000		1,176,046
Total Reverse Repurchase Agreements Outstanding					$	498,356,007	$	500,161,665

See Notes to Consolidated Financial Statements.

15

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

Forward Foreign Currency Exchange Contracts Outstanding at June 30, 2018

Currency Purchased	Amount in Currency Purchased		Currency Sold		Amount in Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
EUR		3,057,416		USD		3,862,036	Citibank, N.A.		10/04/18	$	(265,749	)
USD		3,673,180		EUR		3,057,416	Citibank, N.A.		10/04/18		76,892
USD		18,607,368		EUR		15,901,000	Citibank, N.A.		09/21/18		(76,547	)
USD		3,792,544		GBP		2,834,000	Citibank, N.A.		12/06/18		23,319
USD		9,415,526		GBP		7,087,000	Citibank, N.A.		12/18/18		(15,664	)
USD		10,132,730		GBP		7,611,000	Citibank, N.A.		09/21/18		46,561
Total Forward Foreign Currency Exchange Contracts Outstanding										$	(211,188	)

OTC Credit Default Swaps on Index (Buy Protection) — Outstanding at June 30, 2018

Reference Obligation	Consolidated Master Fund Fixed Deal Receive (Pay) Rate		Payment Frequency		Maturity Date	Counterparty	Notional Amount			Market Value		Upfront Premium Paid (Received)		Unrealized Appreciation (Depreciation)
CMBX.NA.BB.6		(5.00)%		1M	5/11/2063	Merrill Lynch Capital Services, Inc.		3,770,390	USD	$	721,150	$	40,073	$	681,077
CMBX.NA.BB.6		(5.00)%		1M	5/11/2063	Goldman Sachs International		503,830	USD		96,366		109,566		(13,200)
CMBX.NA.BB.6		(5.00)%		1M	5/11/2063	Goldman Sachs International		6,992,000	USD		1,337,337		1,436,755		(99,418)
CMBX.NA.BB.6		(5.00)%		1M	5/11/2063	Morgan Stanley Capital Services LLC		7,540,780	USD		1,442,300		(99,429)		1,541,729
CMBX.NA.BB.6		(5.00)%		1M	5/11/2063	Morgan Stanley Capital Services LLC		7,660,000	USD		1,465,103		738,967		726,136
CMBX.NA.BB.7		(5.00)%		1M	1/17/2047	Morgan Stanley Capital Services LLC		8,302,000	USD		1,201,023		1,625,094		(424,071)
CMBX.NA.BBB-.7		(3.00)%		1M	1/17/2047	Goldman Sachs International		4,956,000	USD		348,407		531,386		(182,979)
CMBX.NA.BBB-.7		(3.00)%		1M	1/17/2047	Goldman Sachs International		4,632,320	USD		325,419		488,458		(163,039)
CMBX.NA.BBB-.7		(3.00)%		1M	1/17/2047	Goldman Sachs International		7,433,000	USD		522,540		808,161		(285,621)
CMBX.NA.BBB-.8		(3.00)%		1M	10/17/2057	Credit Suisse International		2,605,000	USD		309,734		303,724		6,010

See Notes to Consolidated Financial Statements.

16

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

Reference Obligation	Consolidated Master Fund Fixed Deal Receive (Pay) Rate		Payment Frequency		Maturity Date	Counterparty	Notional Amount			Market Value		Upfront Premium Paid (Received)		Unrealized Appreciation (Depreciation)
CMBX.NA.BBB-.8		(3.00)%		1M	10/17/2057	Credit Suisse International		2,006,000	USD	$	238,513	$	238,100	$	413
CMBX.NA.BBB-.8		(3.00)%		1M	10/17/2057	JPMorgan Securities LLC		1,234,000	USD		146,723		161,218		(14,495)
CMBX.NA.BBB-.8		(3.00)%		1M	10/17/2057	Credit Suisse International		1,278,000	USD		151,954		154,150		(2,196)
CMBX.NA.BBB-.8		(3.00)%		1M	10/17/2057	Credit Suisse International		233,000	USD		27,704	��	31,586		(3,882)
CMBX.NA.BBB-.9		(3.00)%		1M	9/17/2058	Goldman Sachs International		1,168,000	USD		120,304		149,132		(28,828)
CMBX.NA.BBB-.9		(3.00)%		1M	9/17/2058	JPMorgan Securities LLC		2,423,000	USD		249,569		203,249		46,320
CMBX.NA.BBB-.9		(3.00)%		1M	9/17/2058	Credit Suisse International		1,189,000	USD		122,467		152,969		(30,502)
CMBX.NA.BBB-.9		(3.00)%		1M	9/17/2058	Goldman Sachs International		1,322,000	USD		136,166		126,231		9,935
CMBX.NA.BBB-.9		(3.00)%		1M	9/17/2058	Goldman Sachs International		1,189,000	USD		122,467		145,282		(22,815)
CMBX.NA.BBB-.9		(3.00)%		1M	9/17/2058	Morgan Stanley Capital Services LLC		1,193,000	USD		122,879		145,131		(22,252)
CMBX.NA.BBB-.9		(3.00)%		1M	9/17/2058	Credit Suisse International		1,197,000	USD		123,291		145,120		(21,829)
CMBX.NA.BBB-.9		(3.00)%		1M	9/17/2058	Credit Suisse International		1,197,000	USD		123,291		139,691		(16,400)
CMBX.NA.BBB-.9		(3.00)%		1M	9/17/2058	Goldman Sachs International		1,450,000	USD		149,712		142,155		7,557
CMBX.NA.BBB-.9		(3.00)%		1M	9/17/2058	JPMorgan Securities LLC		1,319,000	USD		136,187		130,019		6,168
CMBX.NA.BBB-.9		(3.00)%		1M	9/17/2058	Goldman Sachs International		1,197,000	USD		123,291		132,403		(9,112)
CMBX.NA.BBB-.10		(3.00)%		1M	11/17/2059	JPMorgan Securities LLC		1,635,000	USD		146,986		179,149		(32,163)
CMBX.NA.BBB-.10		(3.00)%		1M	11/17/2059	Goldman Sachs International		1,110,000	USD		99,789		109,340		(9,551)

See Notes to Consolidated Financial Statements.

17

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

Reference Obligation	Consolidated Master Fund Fixed Deal Receive (Pay) Rate		Payment Frequency		Maturity Date	Counterparty	Notional Amount			Market Value		Upfront Premium Paid (Received)		Unrealized Appreciation (Depreciation)
CMBX.NA.BBB-.10		(3.00)%		1M	11/17/2059	Morgan Stanley Capital Services LLC		1,095,000	USD	$	98,440	$	80,966	$	17,474
CMBX.NA.BBB-.10		(3.00)%		1M	11/17/2059	Morgan Stanley Capital Services LLC		665,000	USD		59,784		66,595		(6,811)
CMBX.NA.BBB-.10		(3.00)%		1M	11/17/2059	Morgan Stanley Capital Services LLC		3,513,000	USD		315,819		382,667		(66,848)
CMBX.NA.BBB-.10		(3.00)%		1M	11/17/2059	Credit Suisse International		491,000	USD		44,141		55,931		(11,790)
CMBX.NA.BBB-.10		(3.00)%		1M	11/17/2059	Credit Suisse International		2,132,000	USD		191,667		163,146		28,521
CMBX.NA.BBB-.11		(3.00)%		1M	11/18/2054	JPMorgan Securities LLC		962,000	USD		89,658		87,886		1,772
CMBX.NA.BBB-.11		(3.00)%		1M	11/18/2054	Citigroup Global Markets, Inc.		1,261,000	USD		117,525		113,344		4,181
CMBX.NA.BBB-.11		(3.00)%		1M	11/18/2054	Credit Suisse International		962,000	USD		89,658		92,409		(2,751)
Total OTC Credit Default Swaps on Index (Buy Protection)										$	11,117,364	$	9,510,624	$	1,606,740

OTC Credit Default Swaps on Index (Sell Protection) — Outstanding at June 30, 2018

Reference Obligation	Rating	Consolidated Master Fund Fixed Deal Receive (Pay) Rate		Payment Frequency	Maturity Date		Counterparty	Notional Amount(a)			Market Value			Upfront Premium Paid (Received)			Unrealized Appreciation (Depreciation)
CMBX.NA.AA.1	AA		0.25%	1M		10/12/2052	Goldman Sachs International		9,941,482	USD	$	(1,373,499	)	$	(1,578,279	)	$	204,780
CMBX.NA.AA.1	AA		0.25%	1M		10/12/2052	Goldman Sachs International		708,434	USD		(97,876	)		(88,559	)		(9,317	)
CMBX.NA.AA.4	AA		1.65%	1M		02/17/2051	Goldman Sachs International		4,067,143	USD		(1,430,871	)		(1,739,525	)		308,654
CMBX.NA.AA.4	AA		1.65%	1M		02/17/2051	Goldman Sachs International		1,142,432	USD		(401,922	)		(488,621	)		86,699
CMBX.NA.AA.4	AA		1.65%	1M		02/17/2051	Goldman Sachs International		254,230	USD		(89,441	)		(85,755	)		(3,686	)
CMBX.NA.BB.6	BB		5.00%	1M		05/11/2063	Merrill Lynch Capital Services, Inc.		4,420,000	USD		(845,399	)		(515,784	)		(329,615	)
CMBX.NA.BB.6	BB		5.00%	1M		05/11/2063	Merrill Lynch Capital Services, Inc.		4,487,000	USD		(858,214	)		(446,975	)		(411,239	)

See Notes to Consolidated Financial Statements.

18

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

Reference Obligation	Rating	Consolidated Master Fund Fixed Deal Receive (Pay) Rate		Payment Frequency	Maturity Date		Counterparty	Notional Amount(a)			Market Value			Upfront Premium Paid (Received)			Unrealized Appreciation (Depreciation)
CMBX.NA.BB.6	BB		5.00%	1M		05/11/2063	Morgan Stanley Capital Services LLC		3,073,000	USD	$	(587,762	)	$	(20,980	)	$	(566,782	)
CMBX.NA.BB.6	BB		5.00%	1M		05/11/2063	Morgan Stanley Capital Services LLC		4,487,000	USD		(858,214	)		(446,975	)		(411,239	)
CMBX.NA.BB.6	BB		5.00%	1M		05/11/2063	Morgan Stanley Capital Services LLC		10,000,000	USD		(1,912,667	)		247,730			(2,160,397	)
CMBX.NA.BB.7	BB		5.00%	1M		01/17/2047	Citibank, N.A.		57,890	USD		(8,375	)		(2,002	)		(6,373	)
CMBX.NA.BB.7	BB		5.00%	1M		01/17/2047	Citibank, N.A.		2,956,110	USD		(427,651	)		(73,687	)		(353,964	)
CMBX.NA.BB.7	BB		5.00%	1M		01/17/2047	Citibank, N.A.		4,439,000	USD		(642,175	)		(77,924	)		(564,251	)
CMBX.NA.BB.7	BB		5.00%	1M		01/17/2047	Morgan Stanley Capital Services LLC		849,000	USD		(122,822	)		(475	)		(122,347	)
CMBX.NA.BBB-.7	BBB-		3.00%	1M		01/17/2047	Goldman Sachs International		5,461,810	USD		(383,965	)		(773,515	)		389,550
CMBX.NA.BBB-.7	BBB-		3.00%	1M		01/17/2047	Goldman Sachs International		1,992,000	USD		(140,038	)		(178,750	)		38,712
CMBX.NA.BBB-.7	BBB-		3.00%	1M		01/17/2047	Goldman Sachs International		5,142,000	USD		(361,483	)		(263,001	)		(98,482	)
CMBX.NA.BBB-.7	BBB-		3.00%	1M		01/17/2047	Citibank, N.A.		4,425,510	USD		(311,113	)		(135,536	)		(175,577	)
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Citigroup Global Markets, Inc.		1,410,000	USD		(167,649	)		(192,799	)		25,150
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Citigroup Global Markets, Inc.		1,410,000	USD		(167,649	)		(170,230	)		2,581
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	JPMorgan Securities LLC		2,819,000	USD		(335,179	)		(396,443	)		61,264
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	JPMorgan Securities LLC		1,213,000	USD		(144,226	)		(182,674	)		38,448
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	JPMorgan Securities LLC		1,167,000	USD		(138,756	)		(174,786	)		36,030
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	JPMorgan Securities LLC		974,000	USD		(115,809	)		(143,627	)		27,818
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Credit Suisse International		2,698,000	USD		(320,792	)		(377,445	)		56,653
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Credit Suisse International		705,000	USD		(83,824	)		(98,803	)		14,979
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Credit Suisse International		1,540,000	USD		(183,106	)		(195,411	)		12,305
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Credit Suisse International		1,078,000	USD		(128,174	)		(161,189	)		33,015
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Goldman Sachs International		2,448,000	USD		(291,067	)		(354,384	)		63,317
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Goldman Sachs International		1,340,000	USD		(159,326	)		(194,722	)		35,396
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Goldman Sachs International		1,538,000	USD		(182,868	)		(227,719	)		44,851
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Merrill Lynch Capital Services, Inc.		1,155,000	USD		(137,329	)		(173,526	)		36,197

See Notes to Consolidated Financial Statements.

19

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

Reference Obligation	Rating	Consolidated Master Fund Fixed Deal Receive (Pay) Rate		Payment Frequency	Maturity Date		Counterparty	Notional Amount(a)			Market Value			Upfront Premium Paid (Received)			Unrealized Appreciation (Depreciation)
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Merrill Lynch Capital Services, Inc.		1,304,000	USD	$	(155,046	)	$	(203,631	)	$	48,585
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Merrill Lynch Capital Services, Inc.		960,000	USD		(114,144	)		(144,973	)		30,829
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Credit Suisse International		7,695,000	USD		(914,935	)		(1,042,869	)		127,934
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Credit Suisse International		129,000	USD		(15,338	)		(15,192	)		(146	)
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Goldman Sachs International		1,717,000	USD		(204,151	)		(263,892	)		59,741
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Morgan Stanley Capital Services LLC		2,544,000	USD		(302,482	)		(301,159	)		(1,323	)
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Citigroup Global Markets, Inc.		1,441,000	USD		(171,335	)		(191,012	)		19,677
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Goldman Sachs International		1,018,000	USD		(121,040	)		(136,090	)		15,050
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Goldman Sachs International		1,556,000	USD		(185,008	)		(211,160	)		26,152
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Morgan Stanley Capital Services LLC		2,245,000	USD		(266,930	)		(265,300	)		(1,630	)
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Citigroup Global Markets, Inc.		818,000	USD		(97,260	)		(113,718	)		16,458
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Citigroup Global Markets, Inc.		818,000	USD		(97,260	)		(114,096	)		16,836
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Credit Suisse International		1,565,000	USD		(186,078	)		(222,909	)		36,831
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Credit Suisse International		1,221,000	USD		(145,177	)		(146,573	)		1,396
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Credit Suisse International		253,000	USD		(30,145	)		(29,666	)		(479	)
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	JPMorgan Securities LLC		974,000	USD		(115,809	)		(143,627	)		27,818
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Credit Suisse International		171,000	USD		(20,332	)		(24,089	)		3,757
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Merrill Lynch Capital Services, Inc.		1,552,000	USD		(184,533	)		(184,932	)		399
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Credit Suisse International		1,013,000	USD		(120,699	)		(117,840	)		(2,859	)
CMBX.NA.BBB-.8	BBB-		3.00%	1M		10/17/2057	Credit Suisse International		253,000	USD		(30,145	)		(29,783	)		(362	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	JPMorgan Securities LLC		1,607,000	USD		(165,521	)		(153,638	)		(11,883	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	JPMorgan Securities LLC		1,567,000	USD		(161,401	)		(137,679	)		(23,722	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	JPMorgan Securities LLC		1,410,000	USD		(145,230	)		(112,705	)		(32,525	)

See Notes to Consolidated Financial Statements.

20

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

Reference Obligation	Rating	Consolidated Master Fund Fixed Deal Receive (Pay) Rate		Payment Frequency	Maturity Date		Counterparty	Notional Amount(a)			Market Value			Upfront Premium Paid (Received)			Unrealized Appreciation (Depreciation)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	JPMorgan Securities LLC		1,113,000	USD	$	(114,639	)	$	(139,301	)	$	24,662
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	JPMorgan Securities LLC		1,062,000	USD		(109,386	)		(130,045	)		20,659
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Credit Suisse International		540,000	USD		(55,620	)		(51,109	)		(4,511	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Credit Suisse International		1,532,000	USD		(157,796	)		(133,111	)		(24,685	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Credit Suisse International		1,328,000	USD		(136,784	)		(163,170	)		26,386
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Credit Suisse International		1,328,000	USD		(136,784	)		(165,322	)		28,538
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Credit Suisse International		1,703,000	USD		(175,409	)		(196,731	)		21,322
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Goldman Sachs International		2,231,000	USD		(229,793	)		(235,376	)		5,583
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Goldman Sachs International		2,377,000	USD		(244,831	)		(249,040	)		4,209
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Goldman Sachs International		1,432,000	USD		(147,496	)		(148,405	)		909
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Goldman Sachs International		1,530,000	USD		(157,590	)		(136,586	)		(21,004	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Goldman Sachs International		1,213,000	USD		(124,939	)		(133,912	)		8,973
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Goldman Sachs International		1,328,000	USD		(136,784	)		(166,039	)		29,255
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Credit Suisse International		1,050,000	USD		(108,150	)		(135,185	)		27,035
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	JPMorgan Securities LLC		1,032,000	USD		(106,296	)		(131,217	)		24,921
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Merrill Lynch Capital Services, Inc.		2,878,000	USD		(296,434	)		(259,336	)		(37,098	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Credit Suisse International		4,895,000	USD		(504,185	)		(472,909	)		(31,276	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Goldman Sachs International		1,051,000	USD		(108,253	)		(96,155	)		(12,098	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Goldman Sachs International		1,558,000	USD		(160,474	)		(149,605	)		(10,869	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Goldman Sachs International		874,000	USD		(90,022	)		(85,776	)		(4,246	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	JPMorgan Securities LLC		1,516,000	USD		(156,148	)		(135,964	)		(20,184	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Merrill Lynch Capital Services, Inc.		1,717,000	USD		(176,851	)		(228,328	)		51,477
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Credit Suisse International		1,958,000	USD		(201,674	)		(193,900	)		(7,774	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Goldman Sachs International		1,460,000	USD		(150,380	)		(133,969	)		(16,411	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	JPMorgan Securities LLC		758,000	USD		(78,074	)		(68,394	)		(9,680	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	JPMorgan Securities LLC		121,000	USD		(12,463	)		(11,049	)		(1,414	)

See Notes to Consolidated Financial Statements.

21

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

Reference Obligation	Rating	Consolidated Master Fund Fixed Deal Receive (Pay) Rate		Payment Frequency	Maturity Date		Counterparty	Notional Amount(a)			Market Value			Upfront Premium Paid (Received)			Unrealized Appreciation (Depreciation)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Merrill Lynch Capital Services, Inc.		1,018,000	USD	$	(104,854	)	$	(115,916	)	$	11,062
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Merrill Lynch Capital Services, Inc.		1,018,000	USD		(104,854	)		(115,916	)		11,062
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	JPMorgan Securities LLC		1,538,000	USD		(158,414	)		(161,443	)		3,029
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	JPMorgan Securities LLC		1,436,000	USD		(147,908	)		(130,446	)		(17,462	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Citigroup Global Markets, Inc.		783,000	USD		(80,649	)		(95,883	)		15,234
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Citigroup Global Markets, Inc.		2,132,000	USD		(219,596	)		(207,090	)		(12,506	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Citigroup Global Markets, Inc.		1,977,000	USD		(203,631	)		(176,967	)		(26,664	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Credit Suisse International		570,000	USD		(58,710	)		(49,306	)		(9,404	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Credit Suisse International		349,000	USD		(35,947	)		(30,422	)		(5,525	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Credit Suisse International		281,000	USD		(28,943	)		(24,648	)		(4,295	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Goldman Sachs International		3,716,000	USD		(382,748	)		(394,078	)		11,330
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Merrill Lynch Capital Services, Inc.		3,256,000	USD		(335,368	)		(363,463	)		28,095
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Morgan Stanley Capital Services LLC		3,271,000	USD		(336,892	)		(297,691	)		(39,201	)
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Credit Suisse International		3,063,000	USD		(315,489	)		(337,714	)		22,225
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Credit Suisse International		3,716,000	USD		(382,748	)		(388,057	)		5,309
CMBX.NA.BBB-.9	BBB-		3.00%	1M		09/17/2058	Credit Suisse International		1,532,000	USD		(157,796	)		(133,111	)		(24,685	)
CMBX.NA.BBB-.10	BBB-		3.00%	1M		11/17/2059	Merrill Lynch Capital Services, Inc.		1,396,000	USD		(125,500	)		(97,103	)		(28,397	)
CMBX.NA.BBB-.10	BBB-		3.00%	1M		11/17/2059	Morgan Stanley Capital Services LLC		3,513,000	USD		(315,819	)		(360,232	)		44,413
CMBX.NA.BBB-.10	BBB-		3.00%	1M		11/17/2059	Credit Suisse International		3,600,000	USD		(323,640	)		(358,807	)		35,167
CMBX.NA.BBB-.10	BBB-		3.00%	1M		11/17/2059	Citigroup Global Markets, Inc.		2,132,000	USD		(191,667	)		(165,122	)		(26,545	)
CMBX.NA.BBB-.11	BBB-		3.00%	1M		11/18/2054	JPMorgan Securities LLC		1,289,000	USD		(120,135	)		(86,083	)		(34,052	)

See Notes to Consolidated Financial Statements.

22

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

Reference Obligation	Rating	Consolidated Master Fund Fixed Deal Receive (Pay) Rate		Payment Frequency	Maturity Date		Counterparty	Notional Amount(a)			Market Value			Upfront Premium Paid (Received)			Unrealized Appreciation (Depreciation)
CMBX.NA.BBB-.11	BBB-		3.00%	1M		11/18/2054	Citigroup Global Markets, Inc.		1,232,000	USD	$	(114,822	)	$	(82,442	)	$	(32,380	)
CMBX.NA.BBB-.11	BBB-		3.00%	1M		11/18/2054	Credit Suisse International		664,000	USD		(61,885	)		(60,131	)		(1,754	)
Total OTC Credit Default Swaps on Index (Sell Protection)											$	(25,744,510	)	$	(22,400,909	)	$	(3,343,601	)

^(a)  The maximum potential amount the Consolidated Master Fund could be required to pay as a seller of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

OTC Credit Default Swaps on Single-Name Issuer (Buy Protection) — Outstanding at June 30, 2018

Reference Obligation	Consolidated Master Fund Fixed Deal Receive (Pay) Rate			Payment Frequency	Maturity Date	Counterparty	Notional Amount			Market Value			Upfront Premium Paid (Received)			Unrealized Appreciation (Depreciation)
Kohl’s Corp.		(1.00%	)	3M	12/20/2022	JPMorgan Chase Bank, N.A.		19,980,000	USD	$	35,297		$	1,016,878		$	(981,581	)
Kohl’s Corp.		(1.00%	)	3M	12/20/2022	Morgan Stanley Capital Services LLC		6,826,000	USD		12,059			440,355			(428,296	)
Kroger Co.		(1.00%	)	3M	12/20/2022	Goldman Sachs International		32,849,000	USD		(453,295	)		93,288			(546,583	)
Macy’s Retail Holdings, Inc.		(1.00%	)	3M	12/20/2022	Morgan Stanley Capital Services LLC		10,239,000	USD		173,880			1,181,783			(1,007,903	)
Macy’s Retail Holdings, Inc.		(1.00%	)	3M	12/20/2022	Goldman Sachs International		6,577,000	USD		111,691			613,564			(501,873	)
Macy’s Retail Holdings, Inc.		(1.00%	)	3M	12/20/2022	JPMorgan Chase Bank, N.A.		6,577,000	USD		111,691			665,418			(553,727	)
Target Corp.		(1.00%	)	3M	12/20/2022	Goldman Sachs International		17,066,000	USD		(435,570	)		(378,017	)		(57,553	)
Total OTC Credit Default Swaps on Single-Name Issuer (Buy Protection)										$	(444,247	)	$	3,633,269		$	(4,077,516	)

OTC Total Return Swaps Outstanding at June 30, 2018

Reference Instrument

Maturity Date

Payment Frequency

Counterparty

Financing Rate

Notional Amount

Market Value

Upfront Premium Paid (Received)

Unrealized Appreciation (Depreciation)

A&O Hotels & Hostels Holdings AG

1/29/2025

3M

Citibank, N.A.

E + 1.60%

(a)

15,290,000

EUR

$

—

$

—

$

—

Casablanca US Holdings, Inc.

3/25/2024

3M

Citibank, N.A.

L + 1.60%

(b)

69,825,000

USD

349,125

—

349,125

Diamond Resorts International, Inc.

9/2/2023

3M

Citibank, N.A.

L + 1.60%

(b)

23,518,018

USD

516,961

—

516,961

Diamond Resorts International, Inc.

9/2/2023

3M

Citibank, N.A.

L + 1.60%

(b)

781,055

USD

(14,073

)

—

(14,073

)

Diamond Resorts International, Inc.

9/2/2023

3M

Citibank, N.A.

L + 1.60%

(b)

47,880,000

USD

94,874

—

94,874

See Notes to Consolidated Financial Statements.

23

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Schedule of Investments (Continued)

June 30, 2018 (Unaudited)

Reference Instrument	Maturity Date		Payment Frequency	Counterparty	Financing Rate			Notional Amount			Market Value			Upfront Premium Paid (Received)		Unrealized Appreciation (Depreciation)
Parkdean Resorts Holdco Limited		3/3/2024	3M	Citibank, N.A.		L + 1.60%	(b)		12,955,706	GBP	$	(317,151	)	$	—	$	(317,151	)
Parkdean Resorts Holdco Limited		3/3/2024	3M	Citibank, N.A.		—			2,103,000	GBP		(9,833	)		—		(9,833	)
Parkdean Resorts Holdco Limited		3/3/2024	3M	Citibank, N.A.		L + 1.60%	(b)		1,173,000	GBP		(28,715	)		—		(28,715	)
Parkdean Resorts Holdco Limited		3/3/2024	3M	Citibank, N.A.		L + 1.60%	(b)		5,113,686	GBP		(125,181	)		—		(125,181	)
Parkdean Resorts Holdco Limited		3/3/2024	3M	Citibank, N.A.		L + 1.60%	(b)		3,633,959	GBP		(76,964	)		—		(76,964	)
Compass III		4/30/2025	3M	Citibank, N.A.		—			5,750,000	EUR		26,122			—		26,122
Total OTC Total Return Swaps Outstanding											$	415,165		$	—	$	415,165

^(a) E= 3 month EURIBOR

^(b) L= 3 month LIBOR

Centrally Cleared Interest Rate Swaps Outstanding at June 30, 2018

Consolidated Master Fund Pays/ Receives Floating Rate	Floating Rate Index	Fixed Rate		Payment Frequency	Maturity Date		Counterparty		Notional  Amount			Market Value		Upfront Premium Paid (Received)		Unrealized Appreciation (Depreciation)
Receives	Three-Month Libor		1.86%	6M		10/8/2023		Citibank, N.A.		75,000,000	USD	$	3,863,321	$	—	$	3,863,321
Receives	Three-Month Libor		2.03%	6M		5/20/2021		Citibank, N.A.		100,000,000	USD		2,281,583		—		2,281,583
Receives	Three-Month Libor		2.19%	6M		7/10/2024		Citibank, N.A.		49,000,000	USD		1,662,757		—		1,662,757
Receives	Three-Month Libor		2.25%	6M		7/10/2025		Citibank, N.A.		55,000,000	USD		1,977,474		—		1,977,474
Total Centrally Cleared Interest Rate Swaps Outstanding												$	9,785,135	$	—	$	9,785,135

Abbreviation Legend:
	1M	Monthly
	3M	Quarterly
	6M	Semi-Annually
	EURIBOR	Euro Interbank Offered Rate
	LIBOR	London Interbank Offered Rate
Currency Legend
	EUR	Euro
	GBP	British Pound
	USD	United States Dollar

See Notes to Consolidated Financial Statements.

24

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Statement of Assets and Liabilities

As of June 30, 2018 (Unaudited)

Assets:
Investments in securities, at fair value (cost $1,255,586,657)	$	1,264,195,542
Cash		191,099,253
Cash denominated in foreign currencies (cost of $5,564,494)		5,618,151
Cash collateral segregated for counterparties for securities sold short		166,367,960
Cash collateral segregated for counterparties for swaps		83,654,849
Cash collateral segregated for broker for reverse repurchase agreements		1,756,109
Unrealized appreciation on forward foreign currency exchange contracts		146,772
Income receivable		5,520,450
Receivable for periodic payments from swap contracts		3,779,049
Variation margin receivable on centrally cleared swaps		129,865
Swap contracts, at fair value (net premiums paid $13,428,622)		12,549,064
Prepaid expenses and other assets		105,401
Total assets		1,734,922,465
Liabilities:
Securities sold short, at fair value (proceeds of $161,003,967)		158,037,645
Unrealized depreciation on forward foreign currency exchange contracts		357,960
Payable for reverse repurchase agreements		500,161,665
Payable for investments purchased		89,400,110
Swap contracts, at fair value (net premiums received $22,685,638)		27,205,292
Interest payable on securities sold short		841,171
Incentive Fees payable		7,557,215
Management Fees payable		2,552,370
Payable to Affiliate		15,528
Accrued expenses and other liabilities		706,964
Total liabilities		786,835,920
Net assets	$	948,086,545
Components of Net Assets:
Investors’ equity	$	926,185,110
Net unrealized appreciation		21,901,435
Net assets	$	948,086,545

See Notes to Consolidated Financial Statements.

25

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Statement of Operations

For the Six-Months Ended June 30, 2018 (Unaudited)

Investment Income:
Interest	$	33,450,555
Dividends		259,631
Total investment income		33,710,186
Expenses:
Incentive Fees		7,557,215
Management Fees		9,909,677
Administration fees		108,944
Custodian and accounting fees		178,651
Trustees’ fees and expenses		129,230
Transfer Agent fees		119,417
Registration fees		7,439
Professional fees		705,752
Interest on securities sold short		1,658,968
Interest expense on reverse repurchase agreements		4,736,971
Insurance		118,805
Other expenses		72,837
Total expenses		25,303,906
Management Fees waived by Investment Manager		(4,954,838	)
Net expenses		20,349,068
Net investment income		13,361,118
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) from:
Investments in securities		8,863,596
Securities sold short		2,261,514
Forward foreign currency exchange contracts		(2,407,751	)
Foreign currency transactions		(1,981,726	)
Swap contracts		5,912,498
Net realized gain		12,648,131
Net change in unrealized appreciation on:
Investments in securities		891,583
Securities sold short		3,001,719
Forward foreign currency exchange contracts		2,415,642
Foreign currency translations		5,311,671
Swap contracts		5,194,356
Net change in unrealized appreciation		16,814,971
Net realized and unrealized gain		29,463,102
Net increase in net assets resulting from operations	$	42,824,220

See Notes to Consolidated Financial Statements.

26

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Statement of Changes in Net Assets

	Six-Months Ended 6/30/2018 (unaudited)			Year Ended 12/31/2017
Increase (Decrease) in Net Assets
Operations:
Net investment income	$	13,361,118		$	46,634,212
Net realized gain		12,648,131			22,129,520
Net change in unrealized appreciation		16,814,971			12,658,444
Net increase in net assets resulting from operations		42,824,220			81,422,176
Capital Transactions:
Proceeds from subscriptions		12,147,495			41,701,280
Payments for repurchases		(48,259,077	)		(141,682,006	)
Net decrease in net assets resulting from capital transactions		(36,111,582	)		(99,980,726	)
Net increase (decrease) in net assets		6,712,638			(18,558,550	)
Net Assets:
Beginning of period		941,373,907			959,932,457
End of period	$	948,086,545		$	941,373,907

See Notes to Consolidated Financial Statements.

27

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Statement of Cash Flows (Unaudited)

	Six-Months Ended 6/30/2018
Cash Flows from Operating Activities:
Net increase in net assets resulting from operations	$	42,824,220
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:
Purchases of investments in securities		(561,691,958	)
Proceeds from disposition of investments in securities		575,324,451
Proceeds from securities sold short		74,511,563
Payments to cover securities sold short		(71,897,656	)
Net realized gain on investments in securities		(8,863,596	)
Short-term investments, net		29,208,542
Net realized gain on securities sold short		(2,261,514	)
Net accretion of bond discount and amortization of bond and swap premium		(1,004,555	)
Net change in unrealized appreciation on investments in securities		(891,583	)
Net change in unrealized appreciation on securities sold short		(3,001,719	)
Net unrealized appreciation on forward foreign currency exchange contracts		(2,415,642	)
Swap contracts, at fair value net		10,147,714
Changes in assets and liabilities:
(Increase) decrease in assets:
Cash collateral segregated for counterparties for securities sold short		612,165
Cash collateral segregated for counterparties for swaps		(13,719,888	)
Cash collateral segregated for broker for reverse repurchase agreements		4,339,229
Income receivable		(173,458	)
Receivable for periodic payments from swap contracts		(2,309,557	)
Variation margin receivable on centrally cleared swaps		518,828
Prepaid expenses and other assets		(81,399	)
Increase (decrease) in liabilities:
Interest payable on securities sold short		13,661
Interest payable on reverse repurchase agreements		(1,438,414	)
Incentive Fees payable		(6,811,400	)
Management fee payable		149,316
Payable to Affiliate		(140,586	)
Accrued expenses and other liabilities		85,809
Net cash provided by operating activities	$	61,032,573
Cash Flows from Financing Activities
Proceeds from subscriptions		12,147,495
Payment for share repurchases		(48,259,077	)
Reverse repurchase agreements, net		134,945,901
Net cash provided by financing activities		98,834,319
Net increase in cash and foreign currency		159,866,892
Cash, beginning of period		36,850,512
Cash and foreign currency, end of period	$	196,717,404
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	7,820,692

See Notes to Consolidated Financial Statements.

28

Blackstone Real Estate Income Master Fund and Subsidiary

Consolidated Financial Highlights

	Six-Months Ended 6/30/2018 (unaudited)			Year Ended 12/31/2017			Year Ended 12/31/2016			Year Ended 12/31/2015			Year Ended 12/31/2014(a)
Total Return on Net Asset Value		4.71	%(b)		9.20	%		1.24	%		5.55	%		2.43	%(b)
Ratios to Average Net Assets:
Expenses before waiver from Investment Manager and Incentive Fees		3.78	%(c),(d)		3.81	%(c)		3.96	%(c)		3.76	%(c)		3.57	%(d)
Incentive Fees		1.61	%(d)		1.54	%		0.44	%		0.83	%		0.52	%(d)
Expenses before waiver from Investment Manager		5.39	%(c),(d)		5.35	%(c)		4.40	%(c)		4.59	%(c)		4.09	%(d)
Management Fees waiver from Investment Manager		(1.06	)%(d)		(1.06	)%		(1.11	)%		(1.12	)%		(0.48	)%(d)
Net expenses after waiver from Investment Manager		4.33	%(d)		4.29	%		3.29	%		3.47	%		3.61	%(d)
Net investment income excluding Incentive Fees		4.46	%(d)		6.53	%		4.96	%		4.50	%		2.49	%(d)
Net investment income		2.85	%(d)		4.99	%		4.52	%		3.67	%		1.97	%(d)
Supplementary Data:
Net assets, end of period (in thousands)	$	948,087		$	941,374		$	959,932		$	829,981		$	547,179
Portfolio turnover		50	%(e)		85	%		26	%		41	%		31	%(e)

^(a)  For the period April 1, 2014 (commencement of investment operations) to December 31, 2014.

^(b)  Total Return has not been annualized.

^(c)  Includes interest expense on securities sold short and reverse repurchase agreements of 1.36%, 1.40%, 1.49% and 1.26%, for the six-months ended June 30, 2018 and years ended December 31, 2017, December 31, 2016 and December 31, 2015, respectively.

^(d)  Financial ratios have been annualized.

^(e)  Percentage represents the results for the period presented and has not been annualized.

See Notes to Consolidated Financial Statements.

29

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements

For the Period Ended June 30, 2018 (Unaudited)

1. Organization

Blackstone Real Estate Income Master Fund (the “Master Fund”), a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), is a non-diversified, closed-end management investment company. The Master Fund has formed a subsidiary, Blackstone Real Estate Income Master Fund (Cayman) Ltd., a wholly-owned subsidiary (the “Subsidiary”), organized in the Cayman Islands, through which the Master Fund mainly invests in securities exempt from registration pursuant to Regulation S under the Securities Act of 1933, as amended. Blackstone Real Estate Income Fund (“Feeder Fund I”) and Blackstone Real Estate Income Fund II (“Feeder Fund II” and together with Feeder Fund I, the “Feeder Funds”) invest substantially all of their assets in the Master Fund. The Master Fund’s investment objective is to seek long-term total return, with an emphasis on current income, by primarily investing in a broad range of real estate-related debt investments.

The Master Fund consolidates the Subsidiary in accordance with the consolidation policy discussed in Note 2. The Master Fund and Subsidiary are herein referred to collectively as the “Consolidated Master Fund”.

The investment manager of the Consolidated Master Fund and the Feeder Funds is Blackstone Real Estate Income Advisors L.L.C. (the “Investment Manager”), an investment advisor registered under the Investment Advisers Act of 1940, as amended. The Board of Trustees (the “Board” and each member thereof, a “Trustee”) of the Consolidated Master Fund and the Feeder Funds supervises the conduct of the Consolidated Master Fund’s and the Feeder Funds’ affairs and, pursuant to the investment management agreements (the “Investment Management Agreements”), has engaged the Investment Manager to manage the Consolidated Master Fund’s and the Feeder Funds’ day-to-day investment activities and operations.

Capitalized terms used, but not defined herein, shall have the meaning assigned to them in the Prospectus of the Feeder Funds.

2. Summary of Significant Accounting Policies

Basis of Presentation

The Consolidated Master Fund’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are stated in U.S. dollars, unless otherwise noted.

The Consolidated Master Fund is an investment company in accordance with Accounting Standards Codifications 946, Financial Services—Investment Companies (“ASC 946”), which defines investment companies and prescribes specialized accounting and reporting requirements for investment companies.

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Investment Manager to make estimates and assumptions that affect the amounts in the consolidated financial statements and accompanying notes. The Investment Manager believes that the estimates utilized in preparing the consolidated financial statements are reasonable and prudent; however, actual results may differ from these estimates.

Consolidation

The Master Fund consolidates its investment in the Subsidiary. Accordingly, the consolidated financial statements include the assets and liabilities and the results of operations of the Subsidiary listed above. All intercompany balances have been eliminated.

30

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

Valuation Policy

The Consolidated Master Fund values its investments in securities, securities sold short, derivative financial instruments and other investments (together, the “investments”) based on market quotations or at fair value. Market quotations can be obtained from third party pricing service providers or broker-dealers. The Board has established procedures for determining the fair value of investments (the “Valuation Procedures”). The Board has delegated to the Investment Manager day-to-day responsibility for implementing the Valuation Procedures. The Investment Manager provides oversight of the valuation and pricing function of the Consolidated Master Fund for all investments. The Investment Manager will use commercially reasonable efforts to obtain two or more reliable quotations for each investment, and in connection therewith, will generally value such investments based on the average of the quotations obtained. Pursuant to the Valuation Procedures, if market quotations are not readily available (or are otherwise not reliable for a particular investment), the fair value will be determined in good faith by the Investment Manager, and such determinations shall be reported to the Board. Due to the inherent uncertainty of these estimates, estimates of fair value may differ from the values that would have been used had a ready market for these investments existed and the differences could be material. Market quotes are considered not readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade information, bid/ask information, or broker-dealer quotations). The Board has delegated to the Investment Manager the responsibility for monitoring significant events that may materially affect the values of the Consolidated Master Fund’s investments and for determining whether the value of the applicable investments should be re-evaluated in light of such significant events.

Fair Value of Financial Instruments

Fair value guidance defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. U.S. GAAP defines the fair value as the price that Consolidated Master Fund would receive to sell an asset or pay to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date.

Valuation techniques and availability of observable inputs can vary from investment to investment and are affected by a variety of factors including the type of investment and the characteristics specific to the investment and the state of the market place, including the existence and transparency of transactions between market participants. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Investments measured and reported at fair value are classified and disclosed in one of the following levels within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement:

Level 1 – quoted prices are available in active markets for identical investments as of the measurement date. The Consolidated Master Fund does not adjust the quoted price for these investments.

Level 2 – quoted prices are available in markets that are not active or model inputs are based on inputs that are either directly or indirectly observable as of the measurement date.

Level 3 – pricing inputs are unobservable and include instances where there is minimal, if any, market activity for the investment. The Investment Manager, values its investments, in good faith, using valuation techniques applied on a consistent basis. The determination of fair value is based on the best available information in the circumstances and may incorporate the Investment Mangers’ own assumptions and involves significant degree of judgment, taking into consideration a combination of

31

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

internal and external factors. Due to the inherent uncertainty of these estimates, the estimates of fair value may differ from the values that would have been used had a ready market for these investments existed and the differences could be material.

Changes in valuation techniques may result in transfers in or out of an investment’s assigned level within the fair value hierarchy. In addition, in periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition, as well as changes related to liquidity of investments, could cause a security to be reclassified between Level 1, Level 2, or Level 3.

A description of the valuation techniques applied to the Consolidated Master Fund’s major categories of investments measured at fair value on a recurring basis are as follows:

Fixed Income Securities

Fixed income securities, including corporate and convertible bonds, mezzanine debt, U.S. and foreign debt obligations, bank loans, and trade claims, are generally valued by broker-dealer quotations or third party pricing service providers on the basis of last available bid price. In determining the value of a particular investment, pricing service providers may use broker-dealer quotations, reported trades or valuation estimates from their internal pricing models to determine the reported price. The pricing service providers’ internal models use observable inputs such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar assets. Securities that use similar valuation techniques and inputs as described above and have multiple pricing sources are categorized as Level 2 within the fair value hierarchy.

Mortgage-related and asset-backed securities are usually issued as separate tranches, or classes, of securities within each deal. These securities are also normally valued by broker-dealer quotations or third party pricing service providers that use broker-dealer quotations or valuation estimates from their internal pricing models. The pricing models for these securities usually consider the attributes applicable to a particular class of the security (e.g., credit rating, seniority), current market data, estimated cash flows and relative market yield for each class, and incorporate deal collateral performance, as available. Mortgage-related and asset-backed securities that use similar valuation techniques and inputs as described above and have multiple pricing sources are categorized as Level 2 within the fair value hierarchy. Securities with only a single pricing source are categorized as Level 3.

Equity Securities

Equity securities (including common shares of closed-end investment companies) listed on a U.S. securities exchange generally are valued at the last sale or closing price on the day of valuation or, if no sales took place on such date, at the mean between the closing bid and ask prices on the exchange where such securities are principally traded. Securities that use similar valuation techniques and inputs and are active on a listed exchange as described above are categorized as Level 1 within the fair value hierarchy.

Short-Term Investments

The Consolidated Master Fund considers short-term, highly liquid investments with original maturities of 90 days or less when acquired to be short-term investments. At June 30, 2018, the Consolidated Master Fund had $36,668,689 invested in JPMorgan U.S. Treasury Money Market Plus Fund (IJTXX—Institutional Class). Investments in money market funds are categorized as Level 1 within the fair value hierarchy and are valued at net asset value.

32

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

Derivative Financial Instruments

Over the counter (“OTC”) derivative financial instruments, such as credit default swaps, interest rate swaps, total return swaps, forward foreign currency exchange contracts and options contracts derive their value from underlying referenced instruments or obligations, indices, reference rates, and other inputs or a combination of these factors. These contracts are normally valued by third party pricing service providers and/or based on broker dealer quotations. Depending on the product and the terms of the transaction, the value of derivative financial instruments can be estimated using a series of techniques, including, but not limited to, simulation pricing models. The pricing models use inputs that are observed from actively quoted markets such as issuer details, indices, spreads, interest rates, yield curves, dividends and exchange rates. Derivative financial instruments that use similar valuation techniques and inputs as described above are categorized as Level 2

within the fair value hierarchy.

Centrally cleared swaps listed or traded on a multilateral or trade facility platform, such as a registered exchange, are normally valued by third party pricing service providers. For centrally cleared credit default swaps, the clearing facility requires its members to provide actionable levels across complete term structures. These levels along with external third party prices are used to produce daily settlement prices. Centrally cleared interest rate swaps are valued using a pricing model that references the underlying rates to produce the daily settlement price. These securities are categorized as Level 2 within the fair value hierarchy.

Securities Sold Short

The Consolidated Master Fund sells securities short (a “Short Sale”) from time to time. A Short Sale is a transaction whereby the Consolidated Master Fund sells securities it does not own in anticipation of a decline in the market price of those securities, whereby the Consolidated Master Fund’s broker executes a stock borrow transaction to deliver the securities resulting from the Consolidated Master Fund’s Short Sale. The Consolidated Master Fund is obligated to repurchase the securities at the market price at the time of replacement. The Consolidated Master Fund’s obligations to replace the securities in connection with a Short Sale are secured by collateral.

Upon entering into a Short Sale, the Consolidated Master Fund establishes a liability which is recorded as securities sold short in the Consolidated Statement of Assets and Liabilities to represent securities due under the Short Sale agreement. The Consolidated Master Fund is liable to pay any interest income earned during the period the Short Sale is open. The interest is recorded as interest on securities sold short in the Consolidated Statement of Operations.

Option Contracts

The Consolidated Master Fund buys or writes put and call options through listed exchanges and over-the-counter. The buyer of an option has the right to purchase (in the case of a call option) or sell (in the case of a put option) a specified quantity of a specific security or currency at a specified price prior to or on a specified expiration date. The writer of an option is exposed to the risk of loss if the market price of the underlying securities declines (in the case of a put option) or increases (in the case of a call option). The writer of an option can never profit by more than the premium paid by the buyer but can lose an unlimited amount.

Forward Foreign Currency Exchange Contracts

The Consolidated Master Fund enters into forward foreign currency exchange contracts from time to time to obtain investment exposure, enhance return or hedge or protect its portfolio holdings against the risk of future movements in certain foreign currency exchange rates. Forward foreign currency exchange contracts are agreements between two parties to exchange a fixed quantity of one currency for another currency at an

33

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

agreed-upon price on an agreed upon future date. The market value of a forward foreign currency contract fluctuates with the changes in foreign currency exchange rates.

Swap Agreements

The Consolidated Master Fund enters into swaps from time to time, which include total return, interest rate, and credit default swap agreements. Swaps are typically bilaterally negotiated agreements between the Consolidated Master Fund and a counterparty in which the Consolidated Master Fund and counterparty agree to make either periodic net payments on a specified notional amount or a net payment upon termination. Swap agreements are privately negotiated in the over-the-counter market or may be executed in a multilateral or other trade facility platform, such as a registered exchange.

Reverse Repurchase Agreements

The Consolidated Master Fund enters into reverse repurchase agreements from time to time. In a reverse repurchase agreement, the Consolidated Master Fund sells securities in exchange for cash to a financial institution, the counterparty, with a simultaneous agreement to repurchase the same or substantially the same securities at an agreed upon date and price. Certain agreements have no stated maturity and can be terminated by either party at any time. Interest on the value of the reverse repurchase agreements issued and outstanding is based upon competitive market rates determined at the time of issuance. The Consolidated Master Fund may utilize reverse repurchase agreements when it is anticipated that the income to be earned from the investment of the proceeds of the transaction is greater than the interest expense of the transaction. The transactions are generally accounted for as collateralized financing transactions and the Consolidated Master Fund retains ownership of the repurchase security as a pledged asset and records a liability for the repurchase amount.

Investment Transactions and Related Investment Income

Investment transactions are recorded as of the trade date for financial reporting purposes. Income and expenses, including interest, are recorded on an accrual basis. Realized gains and losses from sale of investments are determined on the identified cost basis using the first in first out methodology.

Foreign Currency Translation

The books and records of the Consolidated Master Fund are maintained in U.S. dollars and transactions denominated in foreign currencies are recorded in the Consolidated Master Fund’s records at the rate prevailing when earned and recorded. Assets and liabilities denominated in foreign currencies are adjusted to reflect current exchange rates and any unrealized gains (losses) are included in Net change in unrealized appreciation (depreciation) on investments and foreign currency translations on the Consolidated Statement of Operations. The resultant exchange gains and losses upon settlement of such transactions are included in Net realized gain on investments and foreign currency translations on the Consolidated Statement of Operations. The Consolidated Master Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the changes in market prices of the securities.

Cash

As of June 30, 2018, the Consolidated Master Fund had $191,099,253 in domestic cash and $5,618,151 in foreign cash equivalents held at a major U.S. bank.

Contingencies

Under the Consolidated Master Fund’s Amended and Restated Agreement and Declaration of Trust (the “Declaration of Trust”), the Consolidated Master Fund’s officers and each Trustee are indemnified against certain liabilities that may arise out of the performance of their duties to the Consolidated Master Fund. Additionally, in the normal course of business, the Consolidated Master Fund may enter into contracts that

34

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

contain a variety of representations and indemnification obligations and expects the risk of loss to be remote. Each Feeder Fund bears its pro-rata share of the Consolidated Master Fund’s expenses, subject to reimbursement by the Investment Manager, pursuant to an expense limitation and reimbursement agreement between each Feeder Fund and the Investment Manager.

Income Taxes

The Consolidated Master Fund is classified as a partnership for federal income tax purposes. As such, each investor in the Consolidated Master Fund is treated as the owner of its proportionate share of net assets, income, expenses and realized and unrealized gains and losses of the Consolidated Master Fund. Therefore, no federal income tax provision is required. The Consolidated Master Fund plans to file U.S. Federal and various state and local tax returns. All the Consolidated Master Fund’s assets are managed so that the Feeder Funds can satisfy the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended.

For the open tax years and all major jurisdictions, management of the Consolidated Master Funds has concluded that there are no uncertain tax positions that would require recognition in the consolidated financial statements. No income tax returns are currently under examination. The statute of limitations on the Consolidated Master Fund’s filed U.S. federal tax returns remains open for the fiscal years ended December 31, 2015 through December 31, 2017.

Segregation and Collateralization

In cases in which the 1940 Act and the interpretive positions of the SEC and its staff require that the Consolidated Master Fund segregate assets in connection with certain investments (e.g., futures contracts, forward foreign currency exchange contracts, swaps and options written), or transactions considered to reflect borrowings (e.g., reverse repurchase agreements), the Consolidated Master Fund will, consistent with SEC rules and/or certain interpretive guidance issued by the SEC, segregate assets or designate on its books and records cash or liquid securities having a market value at least equal to the amount that would otherwise be required to be physically segregated. Furthermore, based on requirements and agreements with certain exchanges, third party broker-dealers, futures commissions merchants and clearing organizations, a fund engaging in such transactions may have requirements to deliver/deposit cash or securities to/with an exchange, broker-dealer, futures commission merchant or clearing organization as collateral or margin for certain investments to the extent consistent with the 1940 Act and interpretive positions of the SEC and its staff. The Consolidated Master Fund may mitigate counterparty risk by contractually requiring its counterparties to post collateral under a master agreement and a credit support annex published by International Swaps and Derivatives Association, Inc. (collectively, an “ISDA Master Agreement”) implemented between the Consolidated Master Fund and each of its respective counterparties, as well as through netting provisions contained in the ISDA Master Agreement, and reaching other financial agreements between the Consolidated Master Fund and its counterparty in the ISDA Master Agreement. An ISDA Master Agreement may contain certain provisions regarding, among other things, the right parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. At June 30, 2018, the Consolidated Master Fund used the gross method of presentation in the consolidated financial statements and did not elect to offset amounts eligible for offset under enforceable master netting arrangements or similar agreements. Collateral pledged by the Consolidated Master Fund is segregated by the Consolidated Master Fund’s custodian and identified as such in the Consolidated Master Fund’s portfolio. Collateral can be in the form of cash or securities as agreed to by the Consolidated Master Fund and the applicable counterparty. Typically, the Consolidated Master Fund and counterparties are not permitted to sell, repledge or otherwise use the collateral they receive.

35

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

The Consolidated Master Fund manages counterparty risk by entering into agreements only with counterparties that are believed to have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. The agreements entered into by the Consolidated Master Fund typically contain credit risk related features that are triggered under certain circumstances. Such circumstances may include agreed upon net asset value thresholds. If triggered, the counterparty may terminate the contract and any transactions thereunder.

Recent Accounting Pronouncements

In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities, which shortens the amortization period for the premium on certain callable debt securities to the earliest call date. The amendments are applicable to any purchased individual debt security with an explicit and noncontingent call feature that is callable at a fixed price on a preset date. The amendments do not impact the accounting for callable debt securities held at a discount, which will continue to be accreted to maturity. ASU 2017-08 will become effective on January 1, 2019, with early adoption permitted including adoption in an interim period. The amendments will be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The Consolidated Master Fund is currently evaluating the impact of adopting ASU 2017-08 on its consolidated financial statements.

3. Reverse Repurchase Agreements

The Consolidated Master Fund enters into reverse repurchase agreements with qualified banks or broker-dealers through a Master Repurchase Agreement (“MRA”). An MRA contains provisions for initiation, income payments, events of default and maintenance of securities for repurchase agreements. An MRA may also permit, upon the occurrence of an event of default by one party, the offsetting of obligations under the MRA against obligations under other agreements with the same counterparty to create one single net payment in the event of default or similar events, including the bankruptcy or insolvency of a counterparty.

Reverse repurchase agreements involve the risk that the market value of the securities purchased with the proceeds from the sale of securities received by the Consolidated Master Fund may decline below the price of the securities the Consolidated Master Fund is obligated to repurchase. They also involve the risk that the counterparty liquidates the securities delivered to it by the Consolidated Master Fund under the reverse repurchase agreement following the occurrence of an event of default under the applicable MRA by the Consolidated Master Fund. The Consolidated Master Fund’s use of reverse repurchase agreements also subjects the Consolidated Master Fund to interest costs based on the difference between the sale and repurchase price of a security involved in such a transaction. Additionally, repurchase agreements and reverse repurchase agreements entail the same risks as over-the-counter derivatives, as described in Notes 4 and 8. Securities subject to repurchase under reverse repurchase agreements are designated as such in the Consolidated Schedule of Investments. Due to the short term nature of the reverse repurchase agreements, face value approximates fair value. As of June 30, 2018, the face value of open reverse repurchase agreements was $498,356,007. The weighted average daily balance of reverse repurchase agreements outstanding during the period ended June 30, 2018, was approximately $377,914,891 at a weighted average daily interest rate of 2.53%.

36

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

The following table presents the Consolidated Master Fund’s outstanding reverse repurchase agreements, including accrued interest, which are subject to enforceable MRAs, as well as the collateral delivered related to those reverse repurchase agreements as of June 30, 2018:

Counterparty	Reverse Repurchase Agreements				Collateral Pledged to Counterparty(a)			Net Amount
Morgan Stanley Bank, N.A.		$	(88,058,080	)		$	88,058,080		$	—
RBC (Barbados) Trading Bank Corporation			(193,539,805	)			193,539,805			—
RBC Europe Limited			(106,616,626	)			106,616,626			—
Royal Bank of Canada			(111,947,154	)			111,947,154			—
Total		$	(500,161,665	)		$	500,161,665		$	—

^(a)  Excess of collateral pledged to the individual counterparty is not shown for financial reporting purposes. The total fair value of non-cash and cash collateral pledged at June 30, 2018 was $609,203,114 and $1,756,109, respectively.

The following table presents the Consolidated Master Fund’s remaining contractual maturity of the agreements as of June 30, 2018:

	Overnight and Continuous			<30 days			Between 30 & 90 days			>90 days			Total
Reverse Repurchase Agreements
Commercial Mortgage- Backed Securities		$	—		$	110,157,620		$	272,239,319		$	11,581,946		$	393,978,885
Interest Only Commercial Mortgage-Backed Securities			—			—			30,187			—			30,187
Residential Mortgage-Backed Securities			—			—			101,748,001			—			101,748,001
Corporate Bonds & Notes			—			2,957,844			—			—			2,957,844
Collateral Cash			—			1,446,748			—			—			1,446,748
Total		$	—		$	114,562,212		$	374,017,507		$	11,581,946		$	500,161,665
Gross amount of recognized liabilities for reverse repurchase agreements														$	500,161,665

4. Derivative Financial Instruments

In the normal course of business, the Consolidated Master Fund utilizes derivative contracts in connection with its proprietary trading activities. Investments in derivative contracts are subject to additional risks that can result in a loss of all or part of an investment. The Consolidated Master Fund’s derivative activities and exposure to derivative contracts would be classified by the following primary underlying risks: interest rate, credit, foreign currency exchange rate, commodity price, and equity price risks. In addition to its primary underlying risks, the Consolidated Master Fund is also subject to additional counterparty risk due to inability of its counterparties to meet the terms of their contracts. The following disclosures contain information on how the Consolidated Master Fund uses derivative contracts.

37

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

Forward Foreign Currency Exchange Contracts

The Consolidated Master Fund enters into forward foreign currency exchange contracts from time to time to obtain investment exposure, enhance return or hedge or protect its portfolio holdings against the risk of future movements in certain foreign currency exchange rates. Forward foreign currency exchange contracts are agreements between two parties to exchange a fixed quantity of one currency for another currency at an agreed-upon price on an agreed upon future date. The market value of a forward foreign currency contract fluctuates with the changes in foreign currency exchange rates. These contracts are valued daily and the change in market value is recorded as an unrealized gain or loss on forward foreign currency exchange contracts. When a contract is closed, the Consolidated Master Fund recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

The use of forward foreign currency exchange contracts does not eliminate fluctuations in the underlying prices of the securities of the Consolidated Master Fund, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency exchange contracts may limit the risk of loss due to a decline in the value of the currency being received, they also limit any potential gain that might result should the value of such currency increase. In addition, the Consolidated Master Fund could be exposed to losses if the counterparties to the contracts are unable to meet the terms of the contracts. The Consolidated Master Fund’s maximum potential loss from such contracts is the aggregate face value in U.S. dollars at the time the contract was opened. These contracts involve market and/or credit risk in excess of the amount recognized in the Consolidated Statement of Assets and Liabilities. The Consolidated Master Fund segregates liquid assets with a value equal (on a daily mark-to-market basis) to its obligations under these types of transactions, enters into offsetting transactions or otherwise covers such transactions.

Swap Agreements

The Consolidated Master Fund enters into swaps from time to time, which include total return, interest rate, and credit default swap agreements. Swaps are typically bilaterally negotiated agreements between the Consolidated Master Fund and a counterparty in which the Consolidated Master Fund and counterparty agree to make either periodic net payments on a specified notional amount or a net payment upon termination. Swap agreements are privately negotiated in the over-the-counter market or may be executed in a multilateral or other trade facility platform, such as a registered exchange.

The Consolidated Master Fund may enter into swap agreements for investment purposes or managing exposure to interest rates, credit or market risk, or for other purposes. In connection with these agreements, securities or cash (“segregated cash” or “collateral”) may be paid or received, as applicable, by the Consolidated Master Fund as collateral or margin in accordance with the terms of the respective swap agreements to provide assets of value and recourse in the event of default or bankruptcy/insolvency. Securities posted by the Consolidated Master Fund as collateral for swap agreements identified in the Consolidated Schedule of Investments and segregated cash, if any, are reflected on the Consolidated Statement of Assets and Liabilities.

Credit Default Swaps: The Consolidated Master Fund enters into OTC and/or centrally cleared credit default swap contracts from time to time to hedge credit risk, to hedge market risk, or to gain exposure on single name issues and/or baskets of securities (e.g., CMBX, a tradeable index referencing a basket of CMBS). In an OTC credit default swap contract, the protection buyer typically makes an upfront payment and/or a periodic stream of payments to a counterparty, the protection seller, in exchange for the right to receive a contingent payment upon the occurrence of a “credit event” on the reference obligation or all other equally ranked obligations of the reference entity. Credit events are contract specific but may include bankruptcy, failure to pay, restructurings and obligation acceleration. An upfront payment received by the Consolidated

38

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

Master Fund or made by the Consolidated Master Fund is recorded as a liability or asset, respectively, in the Consolidated Statement of Assets and Liabilities. Periodic payments received or paid by Consolidated Master Fund are recorded as realized gains or losses. OTC credit default swap contracts are marked to market daily and the change is recorded as an unrealized gain or loss on swaps contracts. Upon the occurrence of a credit event, the difference between the par value and the market value of the reference obligation, net of any proportional amount of upfront payment, is recorded as a realized gain or loss on swaps contracts. With respect to selling a credit default swap, the Consolidated Master Fund will segregate assets or otherwise covers its obligations for the notional amount of such credit default swap.

Interest Rate Swaps: The Consolidated Master Fund enters into OTC and/or centrally cleared interest rate swap contracts from time to time to hedge interest rate risk, to gain exposure on interest rates and to hedge prepayment risk. The Consolidated Master Fund is subject to interest rate risk exposure in the normal course of pursuing its investment objectives. Because the Consolidated Master Fund holds fixed rate bonds, the value of these bonds may decrease if interest rates rise. Interest rate swaps are agreements in which one party pays a stream of interest payments, either fixed or floating rate, for another party’s stream of interest payments, either fixed or floating rate, on the same notional amount for a specified period of time. The Consolidated Master Fund’s maximum risk of loss from counterparty credit risk, as opposed to investment and other types of risk, in respect of interest rate swaps is typically the discounted net value of the cash flows to be received from the counterparty over the contracts remaining life, to the extent that amount is positive.

Interest rate swaps can be purchased or sold with an upfront premium. An upfront payment received by the Consolidated Master Fund is recorded as a liability on the Consolidated Statement of Assets and Liabilities. An upfront payment made by the Consolidated Master Fund is recorded as an asset on the Consolidated Statement of Assets and Liabilities. OTC and centrally cleared interest rate swaps are marked-to-market daily and any change is recorded as an unrealized gain or loss on swaps. Daily fluctuations in the value of centrally cleared interest rate swaps are recorded as a receivable or payable for variation margin on the Consolidated Statement of Assets and Liabilities. Payments, including upfront premiums, received or made are recorded as realized gains or losses at the closing of the contract.

Total Return Swaps: The Consolidated Master Fund enters into OTC total return swap contracts from time to time to gain exposure to the investment returns on an underlying financial instrument without purchasing the financial instrument itself. In a total return swap, the Consolidated Master Fund receives the economic returns of the underlying financial instrument, inclusive of any mark to market change in value from the date of such purchase of the underlying instrument, any interest earned from the settlement date of the underlying instrument less a swap financing fee, which is typically LIBOR plus a spread. The total return swap derives its value from the valuation of underlying financial instruments. The underlying financial instruments for the total return swaps held at period end were loans and a bond. The swap is valued daily at current market value and any unrealized appreciation or depreciation is included in the net change in unrealized appreciation/ (depreciation) on swap contracts. Gain or loss is realized on the termination date of the swap and when periodic payments are received or made at the end of each measurement period. During the period the swap is open, the Consolidated Master Fund may be subject to risk from the potential inability of the counterparty to meet the terms of the agreement.

Options Contracts

The Consolidated Master Fund enters into purchased call or put options (“Options”) from time to time. Options may be used to obtain economic exposure equivalent to a long or short position, respectively, or to hedge existing or anticipated portfolio positions. The Consolidated Master Fund may buy or write Options through the OTC market and listed exchanges.

39

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

The buyer has the right to purchase (in the case of a call option) or sell (in the case of a put option) a specified quantity of the underlying at a specified price prior to or on a specified expiration date. The writer of an option is exposed to the risk of loss if the price of the underlying declines (in the case of a put option) or increases (in the case of a call option).

Option contracts purchased (call or put) require the payment of premiums in exchange for the right to purchase or sell an underlying at a contracted strike price and maturity. The premium paid by the Consolidated Master Fund is recorded as an asset and is subsequently marked-to-market to reflect the current fair value of the option.

Option contracts sold (written calls or written puts) obligates the Consolidated Master Fund to buy or sell, within a limited time, an underlying at a contracted strike price and maturity. The writer of an option receives a premium which is recorded as a liability and is subsequently marked-to-market to reflect the current fair value of the option.

At June 30, 2018, the Consolidated Master Fund had the following derivative financial instruments, presented on a gross basis and categorized by risk exposure:

	Asset Derivatives				Liability Derivatives
Risk Exposure	Consolidated Statement of Assets & Liabilities Section	Fair Value			Consolidated Statement of Assets & Liabilities Location	Fair Value
Credit	Swap contracts, premiums paid and unrealized appreciation	$	11,561,982		Swap contracts, premiums received and unrealized depreciation	$	(26,633,375	)
Market	Swap contracts, unrealized appreciation		987,082		Swap contracts, unrealized depreciation		(571,917	)
Interest Rate	Centrally cleared swaps, at fair value (a)		9,785,135		Centrally cleared swaps, at fair value (a)		—
Foreign Exchange	Unrealized appreciation on forward foreign currency exchange contracts		146,772		Unrealized depreciation on forward foreign currency exchange contracts		(357,960	)
Total		$	22,480,971			$	(27,563,252	)
Amount not subject to MNA (b)			(9,785,135	)			—
Total gross amounts subject to MNA		$	12,695,836			$	(27,563,252	)

^(a)  Includes cumulative appreciation/depreciation of centrally cleared swaps as reported in the Consolidated Schedule of Investments. Only the current day’s variation margin is reported within the Consolidated Statement of Assets and Liabilities.

^(b)  See below for definition of “MNA” and disclosure of financial instruments assets and liabilities subject to offset enforceable master netting arrangements.

40

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

The following tables present information about the amount of net realized gain (loss) and net unrealized appreciation (depreciation) on derivative financial instruments for the period ended June 30, 2018:

	Consolidated Statement of Operations Location—Net Realized Gain (Loss)								Consolidated Statement of Operations Location— Net Change in Unrealized Appreciation (Depreciation)
	Swap contracts(a)				Forward foreign currency exchange contracts				Swap contracts(a)				Forward foreign currency exchange contracts
Credit		$	(444,963	)		$	—			$	534,752			$	—
Market			7,040,702				—				(3,305,895	)			—
Interest Rate			(683,241	)			—				7,965,499				—
Foreign Exchange			—				(2,407,751	)			—				2,415,642
Total		$	5,912,498			$	(2,407,751	)		$	5,194,356			$	2,415,642

^(a)  Includes unrealized appreciation (depreciation) on centrally cleared swaps as reported in the Consolidated Schedule of Investments. Only the current day’s variation margin is reported within the Consolidated Statement of Assets and Liabilities.

^(b)  Includes options purchased that are part of investments in securities as shown in the Consolidated Statement of Assets and Liabilities and net realized gain (loss) on investments in securities and net unrealized appreciation (depreciation) on investments in securities as shown in the Consolidated Statement of Operations.

The average notional amounts below represent the Consolidated Master Fund’s average volume for the period ended June 30, 2018:

Derivative Description	Average Notional or Face Amount(a)
Swap contracts		$	798,084,320
Forward foreign currency exchange contracts			200,002,464

^(a)  Averages are based on monthly activity levels during the period ended June 30, 2018.

Netting Arrangements

The Consolidated Master Fund uses master netting arrangements, which allows certain derivative financial instruments and collateral with the same counterparty to be offset to minimize counterparty credit exposure. The table below presents information related to derivative financial instruments that are subject to an enforceable master netting arrangement or similar agreement (“MNA”) and are not offset, as shown in the Consolidated Statement of Assets and Liabilities as of June 30, 2018.

The Consolidated Master Fund enters into ISDA Master Agreements which contain MNA’s that provide for payment netting and, in the case of default or similar event with respect to the counterparty to the MNA, can provide for netting across transactions. Generally, upon counterparty default, the Consolidated Master Fund can terminate all transactions under the MNA and set-off amounts it owes across all transactions under a particular MNA and against collateral under such MNA. The Consolidated Master Fund may not use

41

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

derivatives contracts and related collateral governed by an ISDA to offset reverse repurchase agreements and related collateral governed by an MRA.

The following table presents the Consolidated Master Fund’s derivative financial instrument’s asset and liabilities by counterparty net of related collateral received/pledged by the Consolidated Master Fund at June 30, 2018:

				Gross Amounts Not Offset in the Consolidated Statement of Assets and Liabilities
Counterparty	Gross Amount of Assets Presented in Consolidated Statement of Assets and Liabilities			Derivative Financial Instruments Available to Offset			Cash Collateral Received(a)				Non-Cash Collateral			Net Amount(b)
Citibank, N.A.		$	1,133,853		$(1,133,853	)		$	—			$	—		$	—
Citigroup Global Markets, Inc.			117,525		(117,525	)			—				—			—
Credit Suisse International			1,422,420		(1,422,420	)			—				—			—
Goldman Sachs International			3,493,489		(3,493,489	)			—				—			—
JPMorgan Chase Bank, N.A.			146,988		—				—				—			146,988
JPMorgan Securities LLC			769,124		(769,124	)			—				—			—
Merrill Lynch Capital Services, Inc.			721,150		(721,150	)			—				—			—
Morgan Stanley Capital Services LLC			4,891,287		(4,703,588	)			—				—			187,699
		$	12,695,836		$(12,361,149	)		$	—			$	—		$	334,687
				Gross Amounts Not Offset in the Consolidated Statement of Assets and Liabilities
Counterparty	Gross Amount of Liabilities Presented in Consolidated Statement of Assets and Liabilities			Derivative Financial Instruments Available to Offset			Cash Collateral Pledged(a)				Non-Cash Collateral			Net Amount(b)
Citibank, N.A.			$2,319,191		$(1,133,853)				$(1,185,338)			$	—		$	—
Citigroup Global Markets, Inc.			1,511,517		(117,525	)			(1,393,992	)			—			—
Credit Suisse International			5,020,307		(1,422,420	)			(3,597,887	)			—			—
Goldman Sachs International			8,244,730		(3,493,489	)			(4,751,241	)			—			—
JPMorgan Securities LLC			2,325,393		(769,124	)			(1,556,269	)			—			—
Merrill Lynch Capital Services, Inc.			3,438,526		(721,150	)			(2,717,376	)			—			—
Morgan Stanley Capital Services LLC			4,703,588		(4,703,588	)			—				—			—
		$	27,563,252		$(12,361,149)				$(15,202,103)			$	—		$	—

^(a)  Excess of collateral received/pledged from the individual counterparty is not shown for financial reporting purposes.

^(b)  Net amount represents the net amount receivable from the counterparty in the event of default.

42

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

5. Fair Value Measurement

The following table summarizes the Consolidated Master Fund’s assets and liabilities measured at fair value at June 30, 2018:

Asset Description:	Level 1			Level 2			Level 3			Total
Investment in Securities:
Commercial Mortgage-Backed Securities		$	—		$	798,507,453		$	—		$	798,507,453
Residential Mortgage-Backed Securities			—			163,987,394			—			163,987,394
Interest Only Commercial Mortgage-Backed Securities			—			6,844,193			—			6,844,193
Collateralized Debt Obligations			—			3,934,963			250,000			4,184,963
Mezzanine Debt			—			149,507,205			—			149,507,205
Bank Loan			—			55,773,039			—			55,773,039
High Yield Bonds & Notes			—			42,955,282			—			42,955,282
Common Stock			5,767,324			—			—			5,767,324
Money Market Fund			36,668,689			—			—			36,668,689
Total Investments in Securities		$	42,436,013		$	1,221,509,529		$	250,000		$	1,264,195,542
Forward Foreign Currency Exchange Contracts(a)			—			146,772			—			146,772
Credit Default Swap Contracts			—			11,561,982			—			11,561,982
Total Return Swap Contracts(a)			—			987,082			—			987,082
Interest Rate Swap Contracts			—			9,785,135			—			9,785,135
Total Assets		$	42,436,013		$	1,243,990,500		$	250,000		$	1,286,676,513
Liability Description:	Level 1			Level 2			Level 3			Total
Securities Sold Short:
Foreign Government Obligations		$	—		$	23,336,313		$	—		$	23,336,313
U.S. Treasury Notes			—			134,701,332			—			134,701,332
Total Securities Sold Short		$	—		$	158,037,645		$	—		$	158,037,645
Reverse Repurchase Agreements			—			500,161,665			—			500,161,665
Forward Foreign Currency Exchange Contracts(a)			—			357,960			—			357,960
Credit Default Swap Contracts			—			26,633,375			—			26,633,375
Total Return Swap Contracts(a)			—			571,917			—			571,917
Total Liabilities		$	—		$	685,762,562		$	—		$	685,762,562

^(a)  Represents unrealized appreciation (depreciation).

There were no transfers between Level 1 and Level 2 during the period ended June 30, 2018.

43

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

The following table reconciles the beginning and ending balances of investments measured at fair value using Level 3 inputs:

	Investments in Securities, at fair value
	Collateralized Debt Obligations
Balance as of January 1, 2018		$	377,282
Transfers In			—
Transfers Out			—
Purchases			—
Sales			(1,043,154	)
Amortization
Net realized gain (loss)			1,031,647
Net change in unrealized appreciation			(115,775	)
Balance as of June 30, 2018		$	250,000
Net change in unrealized depreciation related to investments still held as of June 30, 2018		$	(115,775	)

Investments that are categorized as Level 3 were valued utilizing third party pricing information without adjustment. Such valuations are based on unobservable inputs. A significant change in third party information could result in a significantly lower or higher value in such Level 3 investments.

The following table summarizes the quantitative inputs and assumptions used for investments classified within Level 3 of the fair value hierarchy as of June 30, 2018.

Investments in Securities, at fair value	Fair Value at June 30, 2018			Valuation Technique	Unobservable Inputs	Range of inputs (Weighted Average)
Collateralized Debt Obligations		$	250,000	Recovery Analysis	Recovery Ratio	50%

6. Fund Terms

Repurchases

Repurchases will be made only at such times and on such terms as may be determined by the Consolidated Master Fund’s Board, in its sole discretion.

All shares of beneficial interest, if any, repurchased from shareholders of the Feeder Funds by the Feeder Funds, as applicable, will result in corresponding repurchases of common shares of beneficial interest of the Consolidated Master Fund. Refer to the most recent shareholder reports of the Feeder Funds for repurchase offer amounts for the period ended June 30, 2018.

7. Related Party Transactions

Management Fee

The Consolidated Master Fund pays the Investment Manager an aggregate fixed management fee (the “Management Fee”), payable quarterly in arrears on the last Business Day of each quarter. The Management

44

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

Fee accrues monthly at an annual rate of 1.50% of the Consolidated Master Fund’s Managed Assets at the end of such month before giving effect to the Management Fee payment being calculated or any purchases or repurchases of Consolidated Master Fund shares or any distributions by the Consolidated Master Fund. The Management Fee will reduce the net asset value of the Consolidated Master Fund (and indirectly, of the Feeder Funds) as of the end of the accounting period in which it is payable and after the calculation of the Management Fee. Effective October 1, 2014 through December 31, 2018, the Investment Manager agreed to temporarily reduce its Management Fee to an annualized rate of 0.75% of the Consolidated Master Fund’s Managed Assets (“Management Fee Waiver”). The Investment Manager may, in its sole discretion and at any time (including prior to December 31, 2018), elect to extend, terminate or modify its voluntary waiver. The Management Fee, after the Management Fee Waiver, was $4,954,838 for the period ended June 30, 2018.

Incentive Fee

The Consolidated Master Fund accrues a performance-based incentive fee (the “Incentive Fee”) on a monthly basis throughout the fiscal year of the Consolidated Master Fund. The Incentive Fee is paid to the Investment Manager promptly after the end of each fiscal year of the Consolidated Master Fund pursuant to the Consolidated Master Fund’s investment management agreement. The Incentive Fee is determined as of the end of the fiscal year in an amount equal to 15% of the amount by which the Consolidated Master Fund’s Net Capital Appreciation (as defined below) for each Fiscal Period ending within or coterminous with the close of such fiscal year exceeds the balance of the loss carryforward account and any allocated Management Fee expense for such Fiscal Period, without duplication for any Incentive Fees paid during such fiscal year. The Consolidated Master Fund also pays the Investment Manager the Incentive Fee in the event a Fiscal Period is triggered in connection with a repurchase offer by the Consolidated Master Fund. For purposes of calculating the Incentive Fee, “Net Capital Appreciation” means, with respect to any Fiscal Period, the difference, if any, between (x) the sum of (i) the value of the Consolidated Master Fund’s net asset value at the end of that Fiscal Period (prior to the Incentive Fee for such Fiscal Period) increased by the dollar amount of the Consolidated Master Fund’s interests repurchased during the Fiscal Period (excluding repurchases as of the last day of the Fiscal Period after determination of the Incentive Fee), (ii) the amount of any dividends, distributions or withdrawals paid to shareholders during the Fiscal Period and not reinvested in the Consolidated Master Fund (excluding any dividends, distributions or withdrawals to be paid as of the last day of the Fiscal Period), and (iii) the Management Fee expense for that Fiscal Period, and (y) the sum of (i) the value of the Consolidated Master Fund’s net asset value at the beginning of that Fiscal Period (prior to the Management Fee for such Fiscal Period), increased by the dollar amount of the Consolidated Master Fund’s interests issued during the Fiscal Period (excluding any shares issued in connection with the reinvestment of dividends and other distributions paid by the Consolidated Master Fund) and (ii) the amount of any subscriptions to the Consolidated Master Fund during that Fiscal Period. All calculations of Net Capital Appreciation will be made (without duplication) after deduction of all general, administrative and other operating expenses of the Consolidated Master Fund (excluding the Incentive Fee) and any amounts necessary, in the Investment Manager’s sole discretion, as appropriate reserves for such expenses. The Consolidated Master Fund’s Incentive Fee was $7,557,215 for the period ended June 30, 2018.

Expense Payments

Blackstone Holdings Finance Co. L.L.C. (“FINCO”), an affiliate of the Investment Manager, pays expenses on behalf of the Consolidated Master Fund from time to time. The Consolidated Master Fund reimburses FINCO for such expenses paid on behalf of the Consolidated Master Fund. FINCO does not charge any fees for providing such administrative services. The amount of $15,528 as of period-end is recorded as payable to affiliate in the Consolidated Statement of Assets and Liabilities.

45

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

MBS Investments

As of June 30, 2018, the Consolidated Master Fund’s investments included three mortgage-backed securities (“MBS”) with a total cost basis of $130,360,085 collateralized by properties owned by investment vehicles that are advised by an affiliate of the Investment Manager (an “affiliated investment vehicle”) and one MBS with a total cost basis of $7,254,000 collateralized by a loan previously held by an affiliated investment vehicle, which retained the entire first-loss risk retention tranche in the securitization. Such MBS were purchased in fully or over-subscribed offerings on market terms negotiated by the majority third-party investors. Each investment in such MBS by the Consolidated Master Fund and the affiliated investment vehicles represented a minority participation in any individual tranche. The Consolidated Master Fund and the affiliated investment vehicles will forgo all non-economic rights (including voting rights) in such MBS as long as the other affiliated investment vehicles own above a certain threshold of interest in the properties collateralizing or loans underlying, or have an interest in a different part of the capital structure related to, such MBS. For the period ended June 30, 2018, the Consolidated Master Fund recorded interest income of $1,802,389 and an unrealized loss of $2,307,401 related to its investments in such MBS. Such amounts were reported as a component of interest on the Consolidated Statements of Operations.

8. Financial Instruments and Off-Balance Sheet Risk

Market Risk: In the normal course of business, the Consolidated Master Fund invests in securities and enters into transactions where risks exist due to fluctuations in the market (market risk) or failure of the other party to a transaction to perform (credit and counterparty risk). The value of securities held by the Consolidated Master Fund may decline in response to certain events, including those directly involving the companies whose securities are owned by the Consolidated Master Fund; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations.

Derivative Risk: The Consolidated Master Fund enters into derivatives transactions which may include, without limitation, options contracts, futures contracts, options on futures contracts, forward contracts, interest rate swaps, total return swaps, credit default swaps and other swap agreements for investment, hedging or leverage purposes. The Consolidated Master Fund’s use of derivative instruments may be speculative and involves investment risks and transaction costs to which the Consolidated Master Fund would not be subject absent the use of these instruments, and the use of derivatives generally involves leverage in the sense that the investment exposure created by the derivatives may be significantly greater than the Consolidated Master Fund’s initial investment in the derivatives. Thus, the use of derivatives may result in losses in excess of principal or greater than if they had not been used. The ability to successfully use derivative instruments depends on the ability of the Investment Manager. The skills needed to employ derivatives strategies are different from those needed to select portfolio security and, in connection with such strategies, the Investment Manager must make predictions with respect to market conditions, liquidity, currency movements, market values, interest rates and other applicable factors, which may be inaccurate.

Credit and Counterparty Risk: The Consolidated Master Fund will be subject to credit risk with respect to the counterparties to its derivatives contracts (whether a clearing corporation in the case of exchange-traded instruments or another third party in the case of OTC instruments) purchased by the Consolidated Master Fund. The Investment Manager will evaluate and monitor the creditworthiness of counterparties in order to ensure that such counterparties can perform their obligations under the relevant agreements. If a counterparty becomes bankrupt or otherwise fails to perform its obligations under a derivative contract due to financial difficulties, the Consolidated Master Fund may experience significant delays in obtaining any recovery under the derivative contract in a dissolution, assignment for the benefit of creditors, liquidation, winding-up, bankruptcy or other analogous proceeding. In addition, in the event of the insolvency of a counterparty to a

46

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

derivative transaction, the derivative contract would typically be terminated at its fair market value. If the Consolidated Master Fund is owed this fair market value in the termination of the derivative contract and its claim is unsecured, the Consolidated Master Fund will be treated as a general creditor of such counterparty, and will not have any claim with respect to the underlying security. The Consolidated Master Fund may obtain only a limited recovery or may obtain no recovery in such circumstances.

Currently, certain categories of interest rate and credit default swaps are subject to mandatory clearing, and more are expected to be cleared in the future. The counterparty risk for cleared derivatives is generally lower than for uncleared OTC derivative transactions because generally a clearing organization becomes substituted for each counterparty to a cleared derivative contract and, in effect, guarantees the parties’ performance under the contract as each party to a trade looks only to the clearing house for performance of financial obligations. However, there can be no assurance that a clearing house, or its members, will satisfy the clearing house’s obligations to the Consolidated Master Fund. Counterparty risk with respect to certain exchange-traded and over-the counter derivatives may be further complicated by recently enacted U.S. financial reform legislation. Cash collateral that has been pledged to cover obligations of the Consolidated Master Fund under derivative financial instrument contracts, if any, will be reported separately in the Consolidated Statement of Assets and Liabilities. Securities pledged as collateral, if any, for the same purpose are noted in the Consolidated Schedule of Investments.

Liquidity Risk: Some securities held by the Consolidated Master Fund may be difficult to sell, or illiquid, during times of market turmoil or otherwise. Illiquid securities may also be difficult to value. If the Consolidated Master Fund is forced to sell an illiquid asset to meet repurchase requests or other cash needs, the Consolidated Master Fund may be forced to sell at a loss or at a price lower than it could have otherwise received.

Non-Diversification Risk: The Consolidated Master Fund is classified as a “non-diversified” investment company which means that the percentage of its assets that may be invested in the securities of a single issuer is not limited by the 1940 Act. As a result, the Consolidated Master Fund’s investment portfolio may be subject to greater risk and volatility than if investments had been made in the securities of a broad range of issuers.

Additional risks associated with each type of investment are described within the respective security type notes. The Consolidated Master Fund’s prospectus includes a discussion of the principal risks of investing in the Consolidated Master Fund and indirectly in the Consolidated Master Fund.

9. Investment Transactions

The aggregate cost of purchases and proceeds of sales of investments in securities (excluding U.S. Treasury obligations and U.S. government sponsored agency securities) (including maturities), other than short-term investments and securities sold short (if applicable), for the period ended June 30, 2018 was as follows:

Purchases	$	649,914,031
Sales	$	575,268,567

10. Federal Tax Information

As of June 30, 2018, the approximate cost for U.S. federal income tax purposes and gross and net unrealized appreciation (depreciation) in value of investments, securities sold short, and derivatives were as follows:

Aggregate Cost	Gross Unrealized Appreciation	Gross Unrealized (Depreciation)	Net Unrealized Appreciation (Depreciation)
$1,255,586,657	$23,332,093	$(14,723,208)	$8,608,885

47

Blackstone Real Estate Income Master Fund and Subsidiary

Notes to Consolidated Financial Statements (Continued)

For the Period Ended June 30, 2018 (Unaudited)

11. Administration Agreements

The Consolidated Master Fund and Feeder Funds have entered into administration, custody and transfer agency agreements (the “Administration Agreements”) with State Street Bank and Trust Company (“State Street”). State Street and/or its affiliates are responsible for providing administration, custody and transfer agency services for the Consolidated Master Fund and Feeder Funds, including, but not limited to: (i) maintaining corporate and financial books and records of the Consolidated Master Fund and Feeder Funds, (ii) providing administration services and (iii) performing other accounting and clerical services necessary in connection with the administration of the Consolidated Master Fund and Feeder Funds. The services performed by State Street may be completed by one or more of its affiliated companies.

12. Subsequent Events

The Investment Manager has evaluated the impact of subsequent events through the date of financial statement issuance, and determined there were no subsequent events outside the normal course of business requiring adjustment to or disclosure in the consolidated financial statements.

48

Blackstone Real Estate Income Master Fund and Subsidiary

Supplemental Information

June 30, 2018 (Unaudited)

Form N-Q Filings

The Consolidated Master Fund files a complete schedule of portfolio holdings with the Securities and Exchange Commission (the “SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Consolidated Master Fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov within 60 days after the Consolidated Master Fund’s first and third fiscal quarters. The Consolidated Master Fund’s Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and information regarding operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. Holdings and allocations shown on any Form N-Q are as of the date indicated in the filing and may not be representative of future investments. Holdings and allocations should not be considered research or investment advice and should not be relied upon in making investment decisions.

Proxy Voting Policies

The Consolidated Master Fund and the Feeder Funds have delegated proxy voting responsibilities to the Investment Manager, subject to the Board’s general oversight. A description of the policies and procedures used to vote proxies related to the Consolidated Master Fund’s and the Feeder Funds’ portfolio securities, and information regarding how the Consolidated Master Fund and Feeder Funds voted proxies relating to their portfolio securities during the most recent 6-month period ended June 30 is available (1) without charge, upon request, by calling toll free, 1-800-248-1621 and (2) on the SEC’s website at http://www.sec.gov.

Additional Information

Each Feeder Fund’s registration statement includes additional information about the Trustees of the Consolidated Master Fund. The registration statement is available, without charge, upon request by calling 1-855-890-7725.

49

  Blackstone

Blackstone Registered Funds

Privacy Notice

Rev January, 2018

FACTS WHAT DO BLACKSTONE REGISTERED FUNDS DO WITH YOUR PERSONAL INFORMATION?

Why? Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.

What? The types of personal information we collect and share depend on the product or service you have with us. This information can include:   ∎   Social Security number and income   ∎   Assets and investment experience   ∎   Risk tolerance and transaction history

How? All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Blackstone Registered Funds (as defined below) choose to share; and whether you can limit this sharing.

Reasons we can share your personal information	Do Blackstone Registered Funds share?	Can you limit this sharing?
For our everyday business purposes— such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus	Yes	No
For our marketing purposes— to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We don’t share
For our affiliates’ everyday business purposes— information about your transactions and experiences	No	We don’t share
For our affiliates’ everyday business purposes— information about your creditworthiness	No	We don’t share
For our affiliates to market to you	No	We don’t share
For nonaffiliates to market to you	No	We don’t share

Questions? Email us at GLB.privacy@blackstone.com

50

Who we are
Who is providing this notice?	Blackstone Registered Funds include Blackstone Alternative Alpha Fund, Blackstone Alternative Alpha Fund II, Blackstone Real Estate Income Fund, Blackstone Real Estate Income Fund II, Blackstone Alternative Investment Funds, on behalf of its series Blackstone Alternative Multi-Strategy Fund, Blackstone Diversified Multi-Strategy Fund, a sub-fund of Blackstone Alternative Investment Funds plc, and the GSO Funds, consisting of Blackstone / GSO Senior Floating Rate Term Fund, Blackstone / GSO Long-Short Credit Income Fund, Blackstone / GSO Strategic Credit Fund and Blackstone / GSO Floating Rate Enhanced Income Fund
What we do
How do Blackstone Registered Funds protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.
How do Blackstone Registered Funds collect my personal information?	We collect your personal information, for example, when you: ∎   open an account or give us your income information ∎   provide employment information or give us your contact information ∎   tell us about your investment or retirement portfolio We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can’t I limit all sharing?	Federal law gives you the right to limit only: ∎   sharing for affiliates’ everyday business purposes—information about your creditworthiness ∎   affiliates from using your information to market to you ∎   sharing for nonaffiliates to market to you State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.
What happens when I limit sharing for an account I hold jointly with someone else?	Your choices will apply to everyone on your account—unless you tell us otherwise.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and nonfinancial companies. ∎   Our affiliates include companies with a Blackstone name and financial companies such as GSO Capital Partners LP and Strategic Partners Fund Solutions.
Nonaffiliates	Companies not related by common ownership or control. They can be financial and nonfinancial companies. ∎   Blackstone Registered Funds do not share with nonaffiliates so they can market to you.
Joint marketing	A formal agreement between nonaffiliated financial companies that together market financial products or services to you. ∎   Our joint marketing partners include financial services companies.
Other important information
California Residents—In accordance with California law, we will not share information we collect about California residents with nonaffiliates except as permitted by law, such as with the consent of the customer or to service the customer’s accounts. We will also limit the sharing of information about you with our affiliates to the extent required by applicable California law. Vermont Residents—In accordance with Vermont law, we will not share information we collect about Vermont residents with nonaffiliates except as permitted by law, such as with the consent of the customer or to service the customer’s accounts. We will not share creditworthiness information about Vermont residents among Blackstone Registered Funds’ affiliates except with the authorization or consent of the Vermont resident.

51

Blackstone Real Estate Income Master Fund and Subsidiary

Trustees

Michael B. Nash, Chairman

Benedict Aitkenhead

Edward H. D’Alelio

Michael Holland

Thomas W. Jasper

Investment Manager

Blackstone Real Estate Income Advisors L.L.C.

345 Park Avenue

New York, New York 10154

Administrator, Custodian, Fund Accounting Agent and Transfer Agent

State Street Bank and Trust Company

One Lincoln Street

Boston, MA 02111

Officers

Jonathan Pollack, President and Chief Executive Officer

Anthony F. Marone, Jr., Chief Financial Officer and Treasurer

Leon Volchyok, Chief Legal Officer, Chief Compliance Officer and Secretary

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

30 Rockefeller Plaza

New York, New York 10112

Legal Counsel

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

This report, including the financial information herein, is transmitted to the shareholders of Blackstone Real Estate Income Master Fund and Subsidiary for their information. It is not a prospectus or representation intended for use in the purchase of shares of the Fund or any securities mentioned in this report.

You can request a copy of the Consolidated Master Fund’s prospectus and statement of additional information without charge by calling the Consolidated Master Fund’s transfer agent at 1-855-890-7725.

Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, and Rule 23c-1 thereunder that from time to time Feeder Funds may repurchase its common shares from its shareholders.

Additional information regarding the Funds is available at https://www.blackstone.com/the-firm/asset-management/registered-funds

Item 2. Code of Ethics.

Not applicable to this semi-annual report.

Item 3. Audit Committee Financial Expert.

Not applicable to this semi-annual report.

Item 4. Principal Accountant Fees and Services.

Not applicable to this semi-annual report.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Investments.

(a) The registrant’s Schedule of Investments as of the close of the reporting period is included in the Report to Shareholders filed under Item 1 of this Form N-CSR.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to this semi-annual report.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

(a) Not applicable to this semi-annual report.

(b) As of the date of this filing, there have been no changes in any of the portfolio managers identified in the most recent annual report on Form N-CSR.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees.

Item 11. Controls and Procedures.

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”), are effective as of the date within 90 days of the filing date of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended.

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not applicable.

Item 13. Exhibits.

(a)(1) Not applicable to this semi-annual report.

(a)(2) Certifications pursuant to Rule 30a-2(a) are attached hereto.

(a)(3) Not applicable.

(a)(4) Not applicable.

(b) Certifications pursuant to Rule 30a-2(b) are attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Blackstone Real Estate Income Fund
By:	/s/ Jonathan Pollack
	Jonathan Pollack (Principal Executive Officer)
	Chief Executive Officer and President
Date:	September 7, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ Jonathan Pollack
	Jonathan Pollack (Principal Executive Officer)
	Chief Executive Officer and President
Date:	September 7, 2018
By:	/s/ Anthony F. Marone, Jr.
	Anthony F. Marone, Jr. (Principal Financial Officer)
	Chief Financial Officer and Treasurer
Date:	September 7, 2018