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Non-Traded REIT Sales Exceed $3 Billion for Fourth Month in a Row

Sales of non-traded real estate investment trusts exceeded $3 billion for the fourth month in a row with $3.29 billion raised in September, according to Robert A. Stanger and Co..

Sales of non-traded real estate investment trusts exceeded $3 billion for the fourth month in a row with $3.29 billion raised in September, according to Robert A. Stanger and Co.

Blackstone Real Estate Income Trust continues to lead fundraising with $2.17 billion in September, followed by Starwood REIT with $626 million. Ares, formerly known as Black Creek Group, reported $152 million in sales.

“Non-traded REIT fundraising through September has reached $24.6 billion dollars, which surpasses the prior full year record of $19.6 billion set back in 2013,” said to Randy Sweetman, executive managing director of Stanger. “This incredible pace of capital formation continues to attract new entrants to the space with Prudential (PGIM Investments) registering an offering at the end of August.”

Kevin Gannon, chairman and chief executive officer, said that Stanger reconfirms its 2021 fundraising projection of $35 billion for non-traded REITs and $70 billion for the alternative investments it covers.

“In our view, this record breaking influx of capital into non-traded REITs is heavily influenced by the strong total returns posted by [net asset value] REITs during the past year ranging from 9.4 percent to 27.4 percent,” said Gannon.

According to Stanger, the NAV REIT’s with the highest one-year total returns for Class I no-load shares are Blackstone REIT with 27.4 percent, Starwood REIT with 20.9 percent, Black Creek Industrial REIT IV with 20.5 percent, and Nuveen Global Cities REIT with 20.5 percent.

Blackstone Group leads 2021 fundraising with $16.96 billion, followed by Starwood Capital with $4.21 billon. Ares Real Estate Group raised nearly $1.28 billion, followed by FS Investments ($508 million), Nuveen LLC ($466 million), and Hines Interest ($355 million).

In the non-traded perpetual-life business development company space, Blackstone raised nearly $1.10 billion in September, bringing their year-to-date BDC fundraising to $9.41 billion. Blue Owl Capital raised $191 million in September, bringing their year-to-date total to $690 million, including $73.3 million in their now closed traditional BDC.

Stanger said that the non-traded perpetual-life BDC space continues to grow with new deals from Apollo and HPS Investment Partners in the registration pipeline. In addition, Blue Owl has registered another BDC concentrating on the technology sector.

Stanger’s survey of top sponsors of alternative investments revealed more than $57.7 billion raised year-to-date through September via the retail pipeline. Alternative investments included in the survey are non-traded REITs, non-traded BDCs, interval funds, non-traded preferred stock of traded REITs, as well as DSTs, opportunity zone, and other private placement offerings.

The top alternative investment sponsors identified by Stanger are Blackstone Group ($26.40 billion), Starwood Capital ($4.21 billion), Ares Real Estate Group ($1.66 billion), Bluerock Capital ($1.26 billion), Griffin Capital ($1.04 billion), Blue Owl Capital ($953 million), Barings LLC ($854 million), Inland Real Estate ($834 million), Greenbacker Capital ($767 million), and CION Investments ($712 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, 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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