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December 2022 Reported Nontraded REIT Sales Up 50.4% From November

January 18, 2023

December 2022 Reported Nontraded REIT Sales Up 50.4% From November

January 18, 2023

December 2022 Reported Nontraded REIT Sales Up 50.4% From November

January 18, 2023 | James Sprow | Blue Vault

Blue Vault received December 2022 sales totals for eleven nontraded REIT program offerings as of January 17, 2022. Sales reported by those eleven NTRs totaled $465.6 million, up 50.4% from $309.5 million in November, and down 13% Y-O-Y from the $537.4 million in sales in December 2021. Ares Industrial REIT led the reporting REITs with $143.0 million in December, up 155.3% from $56.0 million in November. Next was FS Credit Real Estate Income Trust with $102.5 million in sales, up 49.5% from $68.6 million in November. Ares Real Estate Income Trust was third with $51.3 million, up 211.9% from $16.4 million in November. JLL Income Property Trust had sales increase 40.1% from $37.5 million in November to $52.5 million in December. Hines Global Income Trust reported $45.4 million in sales, down 3.3% from $47.0 million in November. Seven reporting NTRs reported increases in monthly sales, with Cantor Fitzgerald Income Trust posting $19.1 million, up 157.4% from $7.4 million in November, and RREEF Property Trust, with $7.0 million in sales, up 153.7% from $2.7 million in November.

Table I

All capital raise figures for these nontraded REITs include DRIP proceeds.

Chart I NTR Sales

Sales in the chart do not include capital raised by Blackstone REIT, Starwood REIT, Brookfield REIT, and Invesco REIT. Those four REITs raised an estimated $5.071 billion in Q3 2022 and raised capital with equity sales in November 2022 but did not report to Blue Vault. Blackstone REIT raised $4.17 billion (including DRIP) in Q3 2022, followed by Starwood REIT with $1.80 billion, Brookfield REIT with $208 million and Invesco REIT with $21.5 million.

Estimated Common Stock Issuances by Blackstone REIT and Starwood REIT

Using the monthly 424b3 filings by Blackstone REIT and Starwood REIT, we can plot the estimated number of common shares issued by the two nontraded REITs.  The data bridge two offerings for each REIT, so some discontinuity in the monthly totals may show up in the series. Blackstone REIT appears to have issued the most shares over the time period in March 2022, while Starwood REIT issued its highest total in December 2021.  Both REITs reported significant drops in common share issuances over the last eight to eleven months. Both REITs have also been subject to a large volume of redemptions requests, reaching their monthly limits of 2% of total NAV in November 2022 and pro-rating the number of share redemptions fulfilled that month. Shareholders who wished to redeem shares in December will have to re-submit their redemption requests each month as the pro-rated fulfillments reach their monthly limits.

While the news of capped monthly common share redemptions by BREIT and Starwood REIT was the subject of many articles in November and December, no other REITs among the continuously offered NAV REITs reported reaching their redemption limits during the fourth quarter of 2022.  For more information on redemption requests among the NAV nontraded REITs, see the Blue Vault articles “NAV REITs See Surge in Share Repurchases in Q3 2022,” and “Digging Deeper into Blackstone REIT Repurchases” published on the Blue Vault website.

Y-O-Y NTR Capital Raise Comparisons

Year-over-year comparisons show capital raised by reporting nontraded REITs was down 13%.

Table II

Nontraded BDC Capital Raise thru December 2022

Only two nontraded BDCs were raising funds and reported to Blue Vault for December 2022. Blue Owl Capital Inc. (formerly Owl Rock Capital Advisors) had $531.9 million in equity capital raised by two BDCs in December 2022, up 134.1% from the November total of $227.2 million. Blackstone’s nontraded BDC was also raising capital but did not report its sales to Blue Vault. Quarterly capital raise for the two reporting nontraded BDCs since Q3 2021 are shown below thru Q4 2022 totals.

Chart II

Interval and Tender Offer Fund Sales Reported to Blue Vault for December

Twelve funds reported their capital raise for December 2022 to Blue Vault. Bluerock Total Income+ Real Estate Fund raised $138.5 million, down 16% from the $165.6 total for November. Apollo Diversified Real Estate Fund raised $106.6 million, up 57% from the November total of $68.0 million. The 12 funds that reported had total capital raise of $355.1 million, down 5% from the $372.0 million raised by 13 funds in November 2022.

Table III

Listed REITs and BDCs with Nontraded Preferred Stock Issuances

Blue Vault has received sales reports from four listed REITs and a listed BDC that issued nontraded preferred stock in December. Leading the group was listed BDC Prospect Capital with $82.1 million in preferred stock issuances, down 26.8% from the $112.0 million November total. Braemar Hotels & Resorts issued $34.3 million, up 20.7% from $28.5 million in November. Gladstone Land issued $10.0 million in nontraded preferred stock, down 0.2% from the November total. For all five listed funds that issued nontraded preferred and reported to Blue Vault, the total was $141.0 million, down 19.8% from the November total of $175.8 million reported by the same funds.

Table IV

Sources:  SEC, Blue Vault