Sales of non-traded real estate investment trusts plateaued in July 2020 at $430 million, down slightly from the June 2020 total of $454 million, but up 74 percent from the market low of $247 million in May 2020, according to investment bank Robert A. Stanger & Company.
Through July 2020, non-traded REIT sales totaled $7.1 billion, up 33 percent from the same period in 2019.
The year started at a record-breaking pace with approximately $2.4 billion in monthly sales until the pandemic hit in March. Fundraising continued to slow through May, declining roughly 90 percent from earlier in the year. In June, monthly fundraising climbed back to the mid-$400 million range and has since plateaued.
“We currently expect non-listed REIT investment to slowly grow in the coming months, resulting in 2020 fundraising of about $12 billion, level with 2019,” said Kevin Gannon, Stanger’s chairman and chief executive officer.
Blackstone Group leads 2020 fundraising with $5.12 billion in sales, followed by Black Creek Group with $797 million ($740 million in lifecycle and $57 million in net asset value REIT sales), aided by the recycling of distributions from its liquidation of Industrial Property Trust. Starwood Capital Group raised $502 million, followed by LaSalle Investment Management ($197 million) and Hines Interest ($135 million).
“Uncertainty is always challenging for investors which may be contributing to the current plateau in fundraising. As the year progresses and more clarity is gained regarding the economic and political landscape, it may encourage investors to consider real estate as a source of income in this low interest rate environment and for its complimentary characteristics to traditional stock and bond markets,” according to Trisha Miller, executive managing director of Stanger.
Stanger’s survey of top sponsors of alternative investments revealed $14.8 billion in funds raised year-to-date through July 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 identified by Stanger are: Blackstone Group ($5.157 billion), Black Creek Group ($962 million), Griffin Capital ($716 million), Bluerock Capital ($605 million), Owl Rock Capital ($519 million), Starwood Capital ($502 million), Inland Real Estate ($434 million), Bridge Investment Group ($350 million), GWG Holdings ($283 million), and Variant Investments ($273 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.