Stanger Reports Non-Traded REITs Were Resilient Amid December Traded REIT Downturn

Investment banking firm Robert A. Stanger & Company Inc. published fourth quarter 2024 NAV REIT Total Return Index this week, which revealed that the non-traded REITs tracked by the firm posted a modest increase in aggregate net asset value of 1.1% in 2024.

While traded real estate investment trust indices experienced a run-up in 2024, they are still recovering to peak values last seen at year-end 2021. On a three-year basis, traded REITs have averaged an 8.8% decline, underscoring the lingering effects of market volatility. Although a post-election rally briefly pushed some traded REIT indices above 2021 levels, December brought significant headwinds. Traded REIT indices fell sharply, averaging a 6.7% decline in the fourth quarter of 2024. By contrast, net asset value REITs continued to show durability, delivering a 5.8% cumulative gain since the end of 2021.

“We believe the recovery in traded REIT indices bodes well for NAV REITs. The volatility observed in traded REITs throughout the year highlights the appeal of non-traded REITs transacting at NAV.  In Q3 2024, traded REIT indices surged 16%, only to decline by 6.7% in Q4, averaging an 8.3% gain for the second half of the year.  In comparison, the Stanger NAV REIT Total Return Index remained stable, flat in Q3 2024, and down just 0.2% in Q4,” said Kevin T. Gannon, chief executive officer and chairman at Stanger.

“Additionally, the recent $200 million investment by UC Berkeley in Brookfield REIT underscores the growing institutional interest in NAV REITs and the broader private real estate market opportunity,” added Gannon.

According to Stanger, EQT Exeter Real Estate Income Trust Inc. is off to a strong start, with the industrial-focused NAV REIT topping the three-month total return chart at 7.2% in its first quarter of inclusion. PGIM Private Real Estate Fund, Inc. topped the one-year total return rankings for NAV REITs, marking the first time this year FS Credit Real Estate Income Trust Inc. did not hold that title. Despite this, FS Credit retained its leading status in the three-year total return rankings for a second consecutive quarter.

Clarion Partners Real Estate Income Fund Inc. ranked highest in terms of five-year performance with an annualized return of 9.1%, unseating Blackstone Real Estate Income Trust for the first time since Q2 2023.

For Lifecycle REITs, Strategic Storage Trust VI led the one-year total return rankings for a second consecutive quarter, with a 27.4% return in 2024. Lightstone Value Plus REIT II jumped to the top of the three-year total return rankings after finishing third in Q3. SmartStop Self Storage REIT finished atop the five-year total return rankings, unseating Lightstone Value Plus REIT V for the first time since Q3 2023.

There were no new publicly registered non-traded REIT registrations or entrants during Q4 2024.

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