Non-Traded NAV REITs Post Highest Quarterly Return in Five Years
Traded and non-traded real estate investment trusts made gains in the second quarter of 2021, according to investment bank Robert A. Stanger & Company.
Both traded and non-traded real estate investment trusts made gains in the second quarter of 2021 as markets continue to recover from the toll COVID-19 took on real estate securities in 2020, according to investment bank Robert A. Stanger & Company.
A strong stock market lifted the return of the MSCI US REIT Index Gross Total Return (RMS G), a measure of performance of publicly traded REITs, to 12.0 percent in the second quarter, a new record high. Over the last 60 months, the total return of this broader REIT market index was 35.8 percent.
Non-traded net asset value REITs posted a 5.6 percent return for the second quarter as measured by the Stanger NAV REIT Total Return Index, which recovered to its pre-pandemic level during the third quarter of 2020 and has since set a record each quarter.
According to Stanger, non-traded NAV REITs continue to outpace their traded counterparts with a cumulative total return of 48.2 percent over the last 60 months.
The Stanger NAV REIT and Stanger Lifecycle REIT Total Return Indices measure the performance of non-traded REITs on a quarterly basis. Stanger began calculating the indices in December 2015, with a base level of 100.
The indices currently include 15 non-traded NAV REITs (perpetual entities that offer limited periodic liquidity at net asset value) with a total of 79 separate share classes, and 33 traditional “lifecycle” REITs (entities anticipating a five- to seven-year holding cycle followed by a liquidity event) with a total of 55 separate share classes.
All NAV REITs with a minimum of one calendar quarter of performance are included in the NAV REIT Index. Traditional lifecycle REITs are added to the Lifecycle REIT Index in the quarter that their first NAV is announced and are removed from the index upon listing, merger, or in the case of a liquidation by sale of properties, upon conversion to a liquidation basis of accounting.
Founded in 1978, Robert A. Stanger & Co. Inc. is a national investment banking firm specializing in providing investment banking, financial advisory, fairness opinion and asset and securities valuation services to partnerships, REITs, and real estate advisory and management companies in support of strategic planning and execution, capital formation and financings, mergers, acquisitions, reorganizations and consolidations.
