Sales of non-traded real estate investment trusts have reached a staggering $4.63 billion in November, a previously “unfathomable” monthly sum, and more than the industry’s annual fundraising during the 2016 to 2018 period, according to Robert A. Stanger and Co.
November is the sixth month in a row that REIT sales exceeded $3 billion following an October raise of $3.52 billion.
Blackstone Real Estate Income Trust continues to lead with $3.24 billion raised in November, outpacing their own monthly record. Starwood reported $833 million in fundraising for the month, followed by FS Investments with $106 million.
“Non-traded REIT fundraising through November has reached $32.8 billion dollars, more than 3 times their full-year 2020 total, as this incredible pace of capital formation continues to attract new entrants to the space,” said Randy Sweetman, executive managing director at Stanger.
Stanger now expects non-traded REITs to break through its previous 2021 fundraising projection of $35 billion.
“In our view, this record-breaking influx of capital into non-traded REITs is heavily influenced by the strong total returns posted by net asset value REITs during the past year, with the top 10 ranging from 11.5 percent to 27.4 percent,” said Kevin Gannon, chairman of Stanger. “As Blackstone continues to smash all records, we have already surpassed our revised $75 billion projection for all alternatives covered by Stanger…It now looks like 2021 fundraising for the Stanger alternative investment universe will reach $80 billion.”
Blackstone Group leads 2021 non-traded REIT fundraising with $22.62 billion, followed by Starwood Capital with $5.64 billon. Ares Management has raised $1.49 billion in capital, followed by FS Investments ($684 million), Nuveen ($642 million), Hines Interest ($495 million), LaSalle Investment Management ($465), and Kohlberg Kravis Roberts ($404 million).
In the non-traded perpetual-life business development space, Blackstone raised $1.65 billion in November, bringing their year-to-date 2021 BDC fundraising to $12.59 billion. Blue Owl Capital raised $281 million in November bringing their year-to-date fundraising to nearly $1.30 billion, including $73.3 million in their now closed traditional BDC.
Stanger also noted that Apollo Debt Solutions BDC is now effective and is expected to soon factor into the mix. The non-traded perpetual-life BDC space continues to grow with both Bain Capital and Oaktree filing new registrations. The non-traded perpetual-life BDC space continues to grow with multiple funds in the registration pipeline including one from HPS Investment Partners and a second from Blue Owl focused on the technology sector.
Stanger’s survey of top sponsors of alternative investments revealed more than $76 billion raised year-to-date through November via the retail pipeline. Alternative investments included in the survey are non-traded REITs, non-traded BDCs, interval funds, non-traded preferred stock of traded REITs, Delaware statutory trusts, opportunity zone, and other private placement offerings.
The top alternative investment sponsors identified by Stanger are Blackstone Group ($35.26 billion), Starwood Capital ($5.64 billion), Cliffwater LLC ($3.79 billion), Ares Management ($2.15 billion), Bluerock Capital ($1.82 billion), Blue Owl Capital ($1.58 billion), Griffin Capital ($1.53 billion), Inland Real Estate ($1.16 billion), Barings LLC ($1.05 billion), and CION ($922 million).
Robert A. Stanger & Co., Inc., founded in 1978, is an investment banking firm specializing in providing investment banking, financial advisory, fairness opinion and asset and securities valuation services to partnerships, real estate investment trusts and real estate advisory and management companies in support of strategic planning and execution, capital formation and financings, mergers, acquisitions, reorganizations, and consolidations.