Robert A. Stanger & Company has reported that sales of non-traded real estate investment trusts exceeded $1.1 billion in October, up 172 percent compared to October 2018 sales of $404 million. Year-to-date fundraising of $8.7 billion is up 141 percent compared to $3.6 billion for the same period in 2018.
Stanger remains “very bullish” on non-traded REIT capital formation, as continued market uncertainty created by trade negotiations with China, along with the rising interest rate environment, BREXIT, and impeachment proceedings will prompt more investors to boost their holdings in alternative assets, including real estate, the firm noted.
“Stanger is now projecting that non-traded REITs will raise more than $10.5 billion in 2019, up from total sales of $4.6 billion in 2018,” said Kevin Gannon, Stanger’s chairman and chief executive officer.
NAV REITs (perpetual entities that offer limited periodic liquidity at net asset value) have raised $8.0 billion in 2019 through October, up 185 percent from the same period of 2018.
Lifecyle REITs (entities anticipating a five- to seven-year holding cycle followed by a liquidity event) contributed $719 million, an 11 percent decrease from the same period last year.
Blackstone continues to lead capital formation in 2019, raising more than $6.3 billion through October. Starwood Capital is also gaining traction with $643 million year to date. Other year-to-date top fundraisers include Black Creek ($378 million), Hines Interests ($343 million), and LaSalle Investment Management ($318 million).
Stanger’s survey of top sponsors of alternative investments, revealed that more than $20.3 billion was raised through October via the retail pipeline. Alternative investments included in the survey are publicly-registered non-traded REITs ($8.7 billion), non-traded business development companies ($435.4 million), interval funds ($5.4 billion), non-traded preferred stock of traded REITs ($744.2 million), as well as Delaware statutory trusts and private placement offerings ($4.9 billion).
Stanger estimates that fundraising will exceed $25 billion across these alternative investments in 2019, up more than 96 percent from 2018 levels.
The top alternative investment sponsors identified by Stanger are: Blackstone Group ($6.4 billion), Griffin Capital ($1.6 billion), Bluerock Capital ($1.2 billion), Inland Real Estate ($841 million), Owl Rock Capital ($781million), Starwood Capital ($643 million), Black Creek Group ($545 million), Hines Interest ($510 million), Bridge Investment Group ($509 million), LaSalle Investment Management ($318 millions), Broadstone Real Estate ($277 million), CION Investments ($289 million), and Passco ($280 million).
Stanger said that it “attributes the growth in capital formation by alternative investments sponsors to the strong desire by retail and institutional investors to allocate capital to income-oriented real estate and investments that are not directly correlated to the public equity markets while investing under the direction of well-regarded institutional asset managers.”
“Stanger expects this trend to continue for the foreseeable future,” said Gannon.
Robert A. Stanger & Co, founded in 1978, is a nationally recognized 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.
Stanger is also known for its flagship publication, The Stanger Report, a newsletter focused on direct participation program and non-traded REIT investing; The Stanger Market Pulse, focused on public DPP, non-traded REIT and non-traded BDC sales; The IPA/Stanger Monitor, focusing on non-traded REIT performance, The Stanger Interval Fund Report, focusing on non-traded interval fund investing, and The Stanger Digest, a newsletter providing a weekly update on industry activities.