Robert A. Stanger & Company has reported that sales of non-traded real estate investment trusts totaled nearly $1.4 billion in August, up 228 percent compared to $418 million in August 2018. Year-to-date fundraising of $6.7 billion is up 134 percent over the same period 2018 total of $2.8 billion.
Stanger remains very bullish on non-traded REIT capital formation. Kevin Gannon, Stanger’s chairman and chief executive officer, said, “[We are] now projecting that non-traded REITs will raise $10 billion in 2019, up from our prior projection of $8 billion, and total sales of $4.6 billion in 2018.”
NAV REITs (perpetual entities that offer limited periodic liquidity at net asset value) have raised $6 billion in 2019 through August, up 176 percent from the same period of 2018.
Lifecyle REITs (entities anticipating a five to seven year holding cycle followed by a liquidity event) contributed $637 million, down $24 million from the same period last year.
Blackstone Real Estate Income Trust set a monthly fundraising record by a single fund after raking in $1.075 billion in August, and remains the leader in capital formation in 2019 with more than $4.8 billion raised through August.
Starwood Capital is also gaining traction with $105 million in August sales and $446 million raised year to date. Other year-to-date top fundraisers include Black Creek ($326 million), Hines Interests ($278 million), and LaSalle Investment Management ($245 million).
Stanger’s survey of top sponsors of alternative investments revealed nearly $13.8 billion was raised through August via the retail pipeline. Alternative investments included in the survey are publicly-registered non-traded REITs, non-traded business development companies, interval funds, non-traded preferred stock of traded REITs, as well as Delaware statutory trusts and private placement offerings.
Stanger estimates that fundraising will exceed $21 billion across these alternative investments, up more than 50 percent from 2018 levels.
The top alternative investment sponsors identified by Stanger are Blackstone Group ($4.9 billion), Griffin Capital ($1.3 billion), Bluerock Capital ($952 million), Inland Real Estate ($665 million), Owl Rock Capital ($658 million), Black Creek Group ($454 million), Starwood Capital ($446 million), Hines Interest ($433 million), Broadstone Real Estate ($260 million), LaSalle Investment Management ($245 millions), CION Investments ($218 million), and Passco ($212 million).
Stanger attributes the growth in capital formation by alternative investments sponsors to the strong desire by retail and institutional investors to allocate capital to income-oriented real estate and investments that are not directly correlated to the public equity markets while investing under the direction of well-regarded institutional asset managers.
“Stanger expects this trend to continue for the foreseeable future,” said Gannon.
Robert A. Stanger & Co, founded in 1978, is a nationally recognized investment banking firm specializing in providing investment banking, financial advisory, fairness opinion and asset and securities valuation services to partnerships, real estate investment trusts and real estate advisory and management companies in support of strategic planning and execution, capital formation and financings, mergers, acquisitions, reorganizations and consolidations.
Stanger is also known for its flagship publication, The Stanger Report, a newsletter focused on direct participation program and non-traded REIT investing; The Stanger Market Pulse, focused on public DPP, non-traded REIT and non-traded BDC sales; The IPA/Stanger Monitor, focusing on non-traded REIT performance, The Stanger Interval Fund Report, focusing on non-traded interval fund investing, and The Stanger Digest, a newsletter providing a weekly update on industry activities.