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Monthly Redemption Requests Across Top NAVs Surge 65% Since SREIT Announcement

Since Starwood Real Estate Income Trust Inc. lowered the capacity under its share repurchase plan beginning with May 2024 redemptions, other top NAV REITs have seen a surge in monthly redemption requests. This is according to an update by Robert A. Stanger & Co., Inc., regarding nine of the 10 net asset value real estate investment trusts in its research coverage universe.

The REITs included in the outlook were:

  • Ares Industrial Real Estate Income Trust Inc.
  • Ares Real Estate Income Trust Inc.
  • Blackstone Real Estate Income Trust Inc.
  • Brookfield Real Estate Income Trust Inc.
  • FS Credit Real Estate Income Trust Inc.
  • Hines Global Income Trust Inc.
  • JLL Income Property Trust Inc.
  • Nuveen Global Cities REIT Inc.
  • Starwood Real Estate Income Trust Inc.

SREIT is limiting share redemptions to 0.33% of NAV per month and 1% of NAV per quarter. The prior limits in place were 2% monthly and 5% quarterly. SREIT reported that it expects the stricter redemption limits to be temporary, lasting six to 12 months. Last week, SREIT reported that as a results of these changes, it satisfied only 3% of each stockholder’s May repurchase request. Stanger estimates redemption requests to have equaled $1 billion.

“Following SREIT’s announcement last month, we saw a 65% average surge in monthly redemption requests across the top NAV REITs that have reported, with some seeing requests more than doubling versus April,” said David J. Inauen, head of research at Stanger.

Top NAV REITs is defined by Stanger as the 10 NAV REITs with the largest aggregate NAV as of May 31, 2024.

“However, despite investors actively hitting the redemption button, we estimate that all of the other top NAV REITs with monthly redemption programs answered the call by fully satisfying all redemption requests in May, in some cases exceeding the stated capacity limits of their redemption programs,” added Inauen.

Stanger said a report on KKR Real Estate Select Trust Inc. will be updated in the coming days. The REIT was not included in the latest update by Stanger because it conducts self-tender offers quarterly and thereby had no redemptions in May.

Robert A. Stanger & Co., Inc., founded in 1978, is an 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.

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