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Non-Traded REIT Sales Continue to Rebound in November

Sales of non-traded real estate investment trusts jumped 30 percent to $859 million in November.

Sales of non-traded real estate investment trusts jumped 30 percent to $859 million in November, compared to the October raise of $657 million, according to investment bank Robert A. Stanger & Company.

Year-to-date through November 2020, non-traded REITs raised a total of $9.7 billion, down 3.1 percent from the same period 2019.

“The recovery of non-listed REIT investment is well underway, and 2020 fundraising is set to break through our post-COVID projection of $10 billion,” said Kevin T. Gannon, chairman and chief executive officer of Stanger. “We anticipate a strong finish to 2020 for the alternative investment space.”

After record fundraising months in January ($2.4 billion) and February ($2.5 billion), non-traded REIT sales declined to $763 million in March during the onset of the COVID-19 pandemic and continued a downward trajectory through April ($319 million) and May ($247 million) before rebounding slightly in June ($454 million). Following a plateau in July and August, fundraising continued to trend upward in September ($606 million) and October ($656 million).

Blackstone Group continues to lead 2020 fundraising with nearly $7 billion, followed by Black Creek Group with $999 million in sales ($911 million in lifecycle and $88 million in net asset value REIT sales), aided by the recycling of distributions from its liquidation of Industrial Property Trust. Starwood Capital Group raised $852 million, followed by LaSalle Investment Management ($244 million) and Hines Interest ($198 million).

Stanger’s survey of top sponsors of alternative investments revealed $23.6 billion in funds raised year-to-date through November via the retail pipeline. Alternative investments included in the survey are publicly registered non-traded REITs ($9.7 billion), non-traded business development companies ($319.2 million), interval funds ($6.8 billion), non-traded preferred stock of traded REITs ($498.1 million), as well as Delaware statutory trusts ($2.7 billion), opportunity zone ($660.4 million), and other private placement offerings ($1.8 billion). In 2019, alternative investments raised $29 billon in investor equity.

The top alternative investment sponsors in terms of capital formation are Blackstone Group ($7 billion), Black Creek Group ($1.2 billion), Owl Rock Capital ($1.2 billion), Griffin Capital ($925 million), Bluerock Capital ($854 million), Starwood Capital ($852 million), Inland Real Estate ($649 million), GWG Holdings ($466 million), CION Investment ($435 million), and ExchangeRight ($428 million).

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.

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