Ten of the sixteen continuously offered nontraded REIT programs reported declines in their Class I NAVs per share in February 2024. Four of the remaining six REITs reported slight increases in their Class I NAVs per share. Nuveen Global Cities REIT, Inc. had a 0.09% positive adjustment, along with Ares Industrial REIT’s 0.08% increase, Apollo Realty Income Trust’s 0.05% increase, and FS Credit REIT’s 0.04% increase. The median monthly change in NAV per share was negative 0.21%. This drop in NAVs per share resulted in a median total return to shareholders of 0.28% for the 16 REITs. It should also be noted that Blackstone Real Estate Income Trust and Starwood Real Estate Income Trust which make up approximately 77% of the total assets for the 16 REITs, experienced a decrease in their NAV per share at negative 0.28% and negative 0.52%, respectively.
 
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Ares Real Estate Income Trust suffered the greatest decline in its NAV per share at negative 0.91%, resulting in a total monthly return of negative 0.49%. Over the trailing 12-month period, BV estimated the total return to Ares Real Estate Income Trust Class I shareholders at negative 5.44%, compared to the 16-REIT median total return over the same period of negative 1.89%.
With a monthly pro-rated distribution rate, 13 of the 16 NAV REITs had positive Class I shareholder returns in May 2024. The median total return for May for the group was 0.28%, which is a decrease from the prior month’s median total return of 0.40%. As seen in Chart I, Nuveen Global Cities REIT, Inc. and Ares Industrial REIT had the largest increases in Class I NAVs per share. Chart III shows the positive total returns for 13 of 16 NAV REITs, with Nuveen Global Cities REIT, Inc. and FS Credit Real Estate Income Trust, Inc. leading the group.
All the NAV REITs were distributing cash to their Class I shareholders at rates far above the average dividend yield on the S&P 500 listed stock index (1.35% as of March 2024) or the NAREIT All Equity REIT Index for listed REITs (4.19%). All NAV REITs had a distribution yield for Class I shares that exceeded the average distribution yield for listed REITs. The median distribution yield for the 16 NTRs was 5.69% as of May 31, 2024.
In November 2023, the median monthly total returns for the continuous offering NTRs turned negative for the first time since May 2023 and was negative again in December. Since January 2022, the median total returns for the nontraded REITs were negative nine out of 26 months. The S&P 500 Index had negative total returns for twelve of the 26 months. The listed REIT index had negative total returns in 15 of the 26 months. The median monthly total return for the continuous offering NTRs has been positive in each of the first five months of 2024 ranging from 0.09% to 0.40%.
Blackstone REIT posted impressive increases in the net asset values per share from December 2020 until peaking in September 2022. From a high of $15.11 per share for its Class I shares, the REIT has suffered decreases in its NAV through 2023, reaching a low for the year of $14.10 as of December 31, 2023. Since the end of 2023, the NAV has increased slightly to $14.15 or approximately 0.35%.
While the NAV increased slightly in each of the first three months in 2024, (representing the first increases since August 2023), the NAV decreased by 0.28% from April to May in 2024. Blackstone REITs share redemptions began to exceed the 2.0% monthly percent of NAV caps in November 2023 and February 2024 was the first month since that all redemption requests were met. As the largest nontraded REIT by far, with over $57.3 billion in cumulative net asset value as of May 31, 2024, Blackstone REIT’s valuations are indicative of the trend across the sixteen continuously offered REITs.
Starwood REIT, with over $9.6 billion in cumulative net asset value as of March 31, 2024, has also suffered significant declines in its NAV per share. The REIT’s NAV per share has declined by 10.19% since May 31, 2023, compared to Blackstone REIT’s drop during the same period of 3.08%. The resulting total returns for Starwood REIT and Blackstone REIT, offset by their distributions during the quarter, are shown below.
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