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Non-Traded REIT Redemptions Exceed 350% of Fundraising in February

Fundraising among non-traded real estate investment trusts in February 2023 sunk to just $489 million, a low not seen since August 2020, while reported monthly redemptions have exceeded $1.7 billion, an amount reflecting 351% of fundraising and about 1.6% of reported net asset value for the industry, according to the latest monthly report by Robert A. Stanger and Co. Inc.

For the year-to-date period ended Feb. 28, 2023, fundraising for the industry has totaled just $5.1 billion, including $4 billion invested in Blackstone’s NAV REIT versus cumulative 2023 redemptions of $3.4 billion.

According to Stanger chairman Kevin T. Gannon, “The [non-traded REIT] industry deserves high marks for its commitment to providing liquidity to investors at levels never seen before.”

Stanger’s survey of top sponsors tracks fundraising of all alternative investments offered via the retail pipeline including publicly registered non-traded REITs, non-traded business development companies, interval funds, non-traded preferred stock of traded REITs, Delaware statutory trusts, opportunity zone funds, and other private placement offerings. Year-to-date 2023 retail alternative investment fundraising totaled $11.2 billion through February, led by NAV REITs at $5.1 billion, interval funds at $2.6 billion, non-traded BDCs at $1.3 billion and Delaware statutory trusts at $1.0 billion. Blackstone raised $4.9 billion in the alternative investment space year-to-date, including BREIT with $4.4 billion and its perpetual-life BDC, Blackstone Private Credit Fund, with $483 million. Other year-to-date 2023 top fundraisers are Cliffwater ($936 million), Blue Owl Capital ($766 million), Apollo ($328 million), Brookfield ($228 million) and Bluerock Capital Markets ($219 million).

Year-to-date, non-traded REITs have raised more than $5.0 billion. Blackstone Group leads 2023 fundraising with $4.4 billion, followed by FS Investments with $146.6 million. Starwood ($100.0 million), Ares Real Estate Group ($72.6 million) and Hines (60.3 million) round out the list of top five fundraising sponsors.

Non-traded perpetual-life business development companies have raised more than $1.3 billion in 2023 through the end of February, led by Blackstone with $483.5 million. Blue Owl ($450.9 million), Brookfield ($204.4 million) and Apollo ($130.5 million) round out the list of non-traded BDC sponsors surpassing the $100 million mark for the year.

As The DI Wire reported, Blackstone REIT, Starwood REIT and RREEF Property Trust have limited redemptions within the past year while non-traded REITs including Ares Industrial REIT, Ares REIT and JLL Income Property Trust have managed to meet redemptions requests thus far in 2923 through February.

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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