NAV REIT Index Declines by 1% in First Quarter of 2023

Net asset value real estate investment trusts had a combined aggregate net asset value of over $107 billion as of the end of the first quarter in 2023, according to the latest monthly report by Robert A. Stanger and Co. Inc.

The Stanger NAV REIT total return index declined 1.0% during the first quarter, the second consecutive quarter of declines and only the third quarterly decline since the index’s inception in December 2015. As previously reported by The DI Wire, the Stanger NAV REIT total return index took a slight dip in the fourth quarter of 2022, falling 1.26%. For the trailing 12 months ended Q1 2023, Stanger says the index grew 1.8%, comparing favorably to both indices of listed REITs and broader market indices.

“Topping the Q1 2023 performance charts for the NAV REITs are three newcomers, sponsored by J.P. Morgan, Prudential and PIMCO,” stated David J. Inauen, head of research at Stanger. “These three players have each structured their NAV REITs differently, reflecting a traditional NAV REIT, a tender offer fund, and an interval fund. Sector specific NAV REITs focused on industrial and residential investments topped the longer-term performance charts, represented by Ares Industrial Real Estate Income Trust and Cottonwood Communities, respectively.”

SmartStop Self-Storage REIT remained atop the three-year and five-year performance charts among the lifecycle REITs.

“We view longer-term performance measures as the better barometer for lifecyle REITs as it helps to clear out the noise from the timing on when NAVs are updated,” stated Inauen.

Turning to the BDCs, Apollo Debt Solutions led the field in terms of first quarter 2023 performance, and Owl Core Income Corp ranked number one in terms of 1-year total return.

The Stanger NAV REIT and Stanger lifecycle REIT total return indices measure the performance of non-listed REITs on a quarterly basis. Stanger began calculating the indices on Dec. 31, 2015, with a base level of 100.

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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