Sales of non-traded real estate investment trusts posted another flat month with $467 million raised in August 2020, down 66 percent from nearly $1.4 billion in August 2019, according to investment bank Robert A. Stanger & Company.
While the year started at a record-breaking pace with monthly fundraising averaging $2.4 billion, the influence of the pandemic dropped monthly sales to the mid-$400 million range. Year-to-date, sales totaled $7.6 billion, up 13 percent from the same period of 2019.
Kevin T. Gannon, Stanger’s chairman and chief executive officer, noted that the recovery has been “a little slower than originally anticipated,” thus, Stanger now expects 2020 fundraising to reach approximately $10 billion, down from its previous forecast of roughly $12 billion.
In May 2020, sales hit a market low of $247 million, and then inched up to $454 million in June and $430 million in July.
“Although fundraising in non-listed REITs increased approximately 9 percent month over month, it appears to have stalled over the last three months…, said Trisha Miller, executive managing director of Stanger. “This malaise could be driven by several factors including economic and political uncertainty, as well as seasonal factors as many people took much needed time off over the summer months. The question becomes what and when is the catalyst that will re-ignite fundraising.”
Blackstone Group leads 2020 fundraising with nearly $5.5 billion, followed by Black Creek Group with $846 million in sales ($781 million in lifecycle and $65 million in net asset value REIT sales), aided by the recycling of distributions from its liquidation of Industrial Property Trust. Starwood Capital Group raised $555 million, followed by LaSalle Investment Management ($204 million) and Hines Interest ($149 million).
Stanger’s survey of top sponsors of alternative investments revealed $17 billion raised year-to-date through August 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 ($5.5 billion), Owl Rock Capital ($1.04 billion), Black Creek Group ($1.04 billion), Griffin Capital ($785 million), Bluerock Capital ($661 million), Starwood Capital ($555 million), Inland Real Estate ($474 million), Bridge Investment Group ($350 million), GWG Holdings ($323 million), and CION Investment ($304 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.