Non-traded real estate investment trusts set a new highwater mark for monthly sales after raising nearly $2.5 billion in February 2020, a 325 percent increase compared to the $581 million raised in February 2019, according to investment bank Robert A. Stanger & Company.
Once again Blackstone Group’s Blackstone Real Estate Income Trust, which raised $1.8 billion in February, was the primary force behind the numbers.
During the first two months of 2020, non-traded REIT sales totaled approximately $4.9 billion, which is $200 million more than the entirety of 2018.
“Last month Stanger upped its projected 2020 non-traded REIT fundraising estimate to $20 billion,” says Kevin T. Gannon, chairman and CEO of Robert A. Stanger & Co. Inc. “With two consecutive record months to start off the year, it’s hard to predict how high fundraising might go as institutional quality entrants continue to ramp up sales and investors seek alternatives to stock and bond market investments in light of the extraordinary market volatility.”
Blackstone Group leads 2020 fundraising with nearly $3.7 billion, followed by Black Creek Group with $525 million in sales ($494 million in lifecycle and $31 million in NAV REIT sales), aided by the recycling of distributions from its liquidation of Industrial Property Trust.
Starwood Capital Group raised $306 million, followed by LaSalle Investment Management ($107 million) and Hines Interest ($78 million).
Stanger’s survey of top sponsors of alternative investments revealed more than $7.5 billion in funds raised year-to-date through February 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 ($3.7 billion), Black Creek Group ($576 million), Griffin Capital ($376 million), Starwood Capital ($306 million), Owl Rock Capital ($271 million), Bluerock Capital ($246 million), Inland Real Estate ($168 million), LaSalle Investment Management ($119 million), CION Investment ($116 million), and Variant Investments ($106 million).
“We have obviously enjoyed a record-setting bull market in equities for years and a correction has been long overdue,” said Trisha Miller, executive managing director of Stanger. “I would like to think that the money flowing into alternative investments, such as real estate, has better positioned investor portfolios for the type of volatility we are experiencing in the stock market today.”