After hovering in the mid-$400 million range for the last two months, sales of non-traded real estate investment trusts jumped to $1.5 billion in the third quarter of 2020, a 48 percent increase over the prior quarter’s raise of $1 billion, according to investment bank Robert A. Stanger & Company.
Year-to-date through September 2020, non-traded REIT sales totaled nearly $8.2 billion, up 7 percent from the same period of 2019.
After record fundraising months in January ($2.4 billion) and February ($2.5 billion), fundraising 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 in June ($454 million).
“The recovery of non-listed REIT fundraising has been consistent with our 2020 projection of $10 billion,” said Kevin T. Gannon, Stanger’s chairman and chief executive officer. “We anticipate a strong finish to 2020 for the alternative investment space.”
Blackstone Group leads 2020 fundraising with nearly $5.9 billion, followed by Black Creek Group with $898 million in sales ($826 million in lifecycle and $72 million in net asset value REIT sales), aided by the recycling of distributions from its liquidation of Industrial Property Trust. Starwood Capital Group raised $644 million, followed by LaSalle Investment Management ($215 million) and Hines Interest ($168 million).
“The acceleration in fundraising in the third quarter to $1.5 billion had been expected as the performance of the non-listed REIT space was relatively stable for NAV REITs that focus on multifamily and industrial properties,” added Trisha Miller, executive managing director of Stanger.
Stanger’s survey of top sponsors of alternative investments revealed $18.7 billion raised year-to-date through September via the retail pipeline. Alternative investments included in the survey are publicly registered non-traded REITs, non-traded business development companies, interval funds, non-traded preferred stock of traded REITs, as well as Delaware statutory trusts, opportunity zone and other private placement offerings.
The top alternative investment sponsors in terms of capital formation are: Blackstone Group ($5.9 billion), Black Creek Group ($1.1 billion), Owl Rock Capital ($1.1 billion), Griffin Capital ($840 million), Bluerock Capital ($731 million), Starwood Capital ($644 million), Inland Real Estate ($510 million), GWG Holdings ($374 million), Bridge Investment Group ($350 million), and CION Investment ($339 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.