Blue Vault Insights | October 22, 2026

Are the REITs Attracting the Most Capital Necessarily the Strongest Investments?

During the second quarter of 2026, 29 open nontraded REITs reported approximately $5.21 billion in capital raised, according to Blue Vault’s Q2 2026 data.

Three REITs accounted for a substantial portion of that total:

• Blackstone Real Estate Income Trust: $1.22 billion raised; 10.03% trailing one-year Class I return.
• Blue Owl Real Estate Net Lease Trust: $808.5 million raised; 11.50% trailing one-year Class I return.
• Ares Real Estate Income Trust: $646.5 million raised; 11.79% trailing one-year Class I return.

Together, these three REITs raised approximately $2.67 billion, representing more than half of reported quarterly fundraising among the 29 open offerings.

Each attracted considerable capital and reported strong positive returns.

Source: Blue Vault’s Alts Intelligence Portal. Ordered by Q2 2026 gross capital raised among 29 REITs classified as open offerings. Fundraising combines reported public and private amounts at the REIT level and is not net of repurchases. Class I total returns are for the trailing 12 months through June 30, 2026. This ordering does not indicate overall investment quality. Past performance is not indicative of future results.

However, Blue Vault’s October 20 analysis also identified REITs with significantly lower fundraising and higher trailing one-year returns.

For example, Sculptor Diversified Real Estate Income Trust reported a 13.44% trailing Class I return while raising approximately $63.2 million. Cohen & Steers Income Opportunities REIT reported a 12.67% Class I return while raising approximately $64.4 million.

These comparisons don’t necessarily establish that one REIT is a better investment than another. They demonstrate that fundraising activity and historical investment performance are different measures.

For wealth advisors, the more valuable analysis begins after the rankings are published.

Here are five questions worth asking.

1. Are We Comparing Similar Investment Strategies?

Not all nontraded REITs pursue the same investment objectives or strategies.

Some focus primarily on stabilized, income-producing properties. Others pursue net lease investments, industrial properties, diversified real estate portfolios, or commercial real estate credit.

Those differences matter.

Consider a REIT focused on commercial real estate debt compared with one investing primarily in property equity.

The credit-focused REIT may derive much of its income from interest payments on loans, while the equity-focused REIT depends more directly on property operations, occupancy, rental income, valuations, and eventual property dispositions.

Both may report positive trailing one-year returns, but the underlying sources of those returns—and associated risks—can be quite different.

2. Are We Comparing the Same Share Classes and Return Periods?

Two REITs may report similar total returns without those figures being directly comparable.

Share-class expenses can differ. The treatment of reinvested distributions can also affect total-return calculations, and a trailing 12-month return measures a different investment experience than a calendar-year or annualized since-inception return.

For the comparison discussed here, Blue Vault uses Class I trailing one-year returns wherever available. For JLL Income Property Trust, Class M-I is used because a comparable Class I return is unavailable.

Identifying that difference is important. Advisors should confirm:

• Which share class is being reported?
• Is the return measured over the same ending date and time period?
• Does the calculation assume distributions are reinvested?
• Are the returns net of the relevant share-class expenses?

3. Does Capital Raising Tell Us How Much Money Is Actually Flowing Into a REIT?

A large capital-raising figure can indicate substantial new investment activity.

But gross fundraising and net investor flows are not the same thing.

Across the 29 open nontraded REITs in Blue Vault’s Q2 2026 analysis:

• Gross capital raised: Approximately $5.21 billion.
• Reported share repurchases: Approximately $1.65 billion.
• Simple difference: Approximately $3.56 billion.

That difference is useful context, but it should not be interpreted as a comprehensive measure of net capital flows without accounting for all relevant inflows, outflows, and reporting conventions.

Source: Blue Vault’s Alts Intelligence Portal, Q2 2026. Funds are ordered by gross capital raised. Gross fundraising less share repurchases is not a comprehensive net capital-flow measure. Repurchases do not indicate the total amount requested or whether all requests were fulfilled.

These differences are substantial.

Blackstone reported considerably more share repurchase activity relative to new capital raising than either Blue Owl or Ares during the quarter.

However, those figures alone do not establish stronger or weaker investor confidence, nor do they indicate whether redemption demand was fully satisfied.

A more complete liquidity assessment would also consider redemption requests, the amount of requests fulfilled, repurchase limitations, and other available liquidity measures.

4. What Is Actually Driving the REIT’s Total Return?

A reported distribution rate and an investment’s total return measure different things.

A REIT can distribute cash to shareholders while experiencing a decline in its reported NAV. Alternatively, a REIT with a modest distribution rate can generate a higher total return through appreciation in NAV.

Consider two hypothetical REITs.

Illustrative example only; these are not actual fund results. Distributions and NAV changes are measured against the same beginning NAV. Simplified total return equals cash distributions as a percentage of beginning NAV plus the percentage change in NAV, excluding reinvestment and timing effects.

REIT A distributed more cash, but REIT B generated the higher simplified total return.

The critical distinction is that distributions are generally included in total return, while NAV appreciation or depreciation represents the change in the reported value per share.

A higher distribution rate does not necessarily translate into a higher total return.

We’ll examine those components in greater detail in our October 27 Blue Vault Insights report.

5. What Risks Accompany the Reported Return?

A higher reported return does not necessarily indicate a more favorable investment opportunity.

Advisors should evaluate the financial and operational risks associated with the REIT, including its leverage, debt maturities, distribution coverage, and liquidity characteristics.

Consider two of the largest capital raisers in Q2 2026.

Source: Blue Vault’s Alts Intelligence Portal, Q2 2026. Selected comparison ordered by reported debt-to-total-assets ratio, not overall investment quality. Debt / total assets is a reported accounting measure, not a fair-value property loan-to-value ratio. Returns are trailing 12-month Class I total returns through June 30, 2026. Fund strategies, portfolios, and borrowing terms may differ.

These funds reported trailing one-year returns differing by just 0.29 percentage points.

Yet their reported debt-to-total-assets ratios differed by approximately 14.2 percentage points.

That is a meaningful financial distinction, although the accounting ratio should not be confused with a property-level loan-to-value ratio.

Does this mean one REIT is necessarily better than the other? No.

Their investment strategies, portfolio compositions, borrowing terms, and asset characteristics may differ.

But the comparison illustrates that two funds with similar headline returns can have materially different financial profiles.

Other Factors Advisors Should Consider

Leverage and debt maturities

How much debt does the REIT carry? What percentage matures over the next 12 to 24 months? How could refinancing costs affect future operating performance?

Distribution coverage

Are shareholder distributions supported by recurring operating performance, or does the fund rely partly on other sources of cash?

Liquidity and redemption provisions

What share repurchase provisions apply? Have redemptions been limited or prorated? What liquidity resources are available to satisfy investor requests?

Putting the Five Questions Together

Fundraising and performance rankings are valuable starting points.

But the deeper insights come from examining multiple characteristics across funds using a consistent research framework.

Blue Vault Intelligence allows advisors to move beyond individual fund presentations and examine the broader nontraded REIT market.

By comparing fundraising, historical returns, share repurchases, NAV changes, distributions, leverage, and other financial metrics, advisors can develop a more complete perspective on individual funds and their peers.

Internal product information tells advisors about a particular REIT. Blue Vault Intelligence helps them understand how that REIT compares with the market.

Coming Next: A Deeper Look at REIT Performance

Our October 20 and October 22 editions introduced the differences between fundraising activity and investment performance, along with important questions advisors should consider.

Over the next two weeks, Blue Vault Insights will explore the factors underlying those results.