Institutional sponsors moving in on nontraded REIT market
June 26, 2017 | by TOM YEATTS | S&P Global Market Intelligence
Regulatory changes and the departure of key sponsors have dramatically changed the nontraded real estate investment trust sector, and the players likely to dominate going forward will be much larger, with more prominent reputations, than their predecessors.
Large institutional asset managers like Blackstone Group LP, RREEF America LLC and Colony NorthStar Inc. are staking out significant claims in an industry buffeted first by the 2014 accounting scandal within the American Realty Capital empire that derailed the top sponsor in the space, and then by regulatory changes around fee transparency that have made it more difficult for smaller players to be profitable in the business.
Blackstone, which entered the nontraded REIT field in August 2016 with the creation of Blackstone Real Estate Income Trust Inc., carved out a 40.9% market share in the first five months of 2017, with roughly $886 million of sales, according to data from investment banking firm Robert A. Stanger & Co.
