During the third quarter 2014, non-traded REITS acquired $5 billion of core commercial real estate, putting the year-to-date total at $14.2 billion, according to data provided by the MTS Research Advisors 3Q 2014 Non-Listed REIT Market Intelligence Report. This is down from the $15.2 billion acquired for the same period last year.
Retail and medical offices were the hot sectors during the quarter with non-traded REITs investing 68% of total investment dollars in these two asset classes. $1.7 billion was invested in each sector for a total of $3.4 billion.
Cole Credit Property Trust IV and ARC – Retail Centers of America were the largest retail investors with $724 million and $191 million in acquisitions respectively in Q3.
ARC Healthcare II and Carter Validus Mission Critical invested $816 million and $373 million respectively in medical office properties, leading the charge amongst all healthcare related non-traded REITs.
Capitalization rates (cap rates) decreased again during the quarter to 7.08% reflecting the rise in commercial real estate prices.
Year-to-date through the end of September, cap rates were 7.20% compared to 7.33% for the same period last year. After peaking in 2009, cap rates have declined by 20%.
Office properties had the highest cap rates during Q3 of 8.03%, while medical office and retail investments made by non-traded REITs were moderate at 7.09% and 6.98% respectively.
Additional information is available in The MTS Research Non-Listed REIT Market Intelligence Report which is available by subscription. To learn more, click here.