January Nontraded REIT Capital Raise

February 11, 2020 | James Sprow | Blue Vault

Blue Vault received January sales totals for 17 effective nontraded REIT program offerings as of January 11. Sales reported by those 17 NTRs totaled $417.1 million for January. Based upon a comparison of the 16 REITs that reported both January and December sales, the total capital raise for the 16 REITs was $375.5 million in January versus $177.7 million in December, an increase of 111%. This huge increase for the subsample of 16 NTRs was due to the nearly six times larger total in January for Black Creek Industrial REIT IV. That REIT program benefitted from the reinvestment of proceeds from the Industrial Property Trust sale to Prologis that closed January 8, 2020. Black Creek Industrial REIT IV raised $205.7 million in January after only raising $30.0 million in December. The December total still ranked the REIT in third place among the 17 reporting REITs in that month.

Among the other nontraded REIT offerings that had increases in capital raise between December and January, InPoint Commercial Real Estate Income’s raise increased from $3.77 million in December to over $8.59 million in January, a 128% increase. Procaccianti Hotel REIT increased capital raise from $1.68 million in December to $2.50 million in January, a 49% increase. Hines Global Income Trust increased capital raise from $27.17 million in December to $37.14 million in January. Nine nontraded REITs reported increased sales in January compared to December. The nine NTRs with increases are shown in Table I.

Table I

Other NTR programs raising funds in January 2020 that have yet to report their sales to Blue Vault as of February 11 include Blackstone Real Estate Income Trust, Oaktree REIT, and Starwood REIT. Based upon public filings and past reports from these REITs, the total for the nontraded REIT industry for January 2020 would likely exceed $1.7 billion, which would be the highest monthly total since 2013.

Nontraded BDC Sales

Three nontraded BDCs were raising funds in January 2020 and reported those sales to Blue Vault. Owl Rock Capital Corporation raised $65.5 million, up 11.9% from $58.5 million in December. The total capital raise for Owl Rock, MacKenzie Capital Management and TP Flexible Income Fund in January was $66.6 million. MacKenzie reported nontraded BDC sales in January of just $1.10 million.