March 1, 2023

January 2023 Reported Nontraded REIT Sales Down 50.3% from December 2022

February 28, 2023 | James Sprow | Blue Vault

Blue Vault received January 2023 sales totals for eleven nontraded REIT program offerings as of February 17, 2023. Sales reported by those eleven NTRs totaled $231.6 million, down 50.3% from $465.6 million in December, and down 54% Y-O-Y from the $507.6 million in sales in January 2021. FS Credit Real Estate Income Trust led the reporting REITs with $89.1 million in January, down 13.0% from $102.5 million in December. Next was Ares Industrial REIT with $32.7 million in sales, down 77.1% from $143.0 million in December. Hines Global Income Trust was third with $29.6 million, down 35.0% from $45.4 million in December. JLL Income Property Trust had sales decrease 63.8% from $52.5 million in December to $19.0 million in January. No reporting NTRs reported increases in monthly sales, with RREEF Property Trust posting $6.4 million, down 8.5% from $7.0 million in December for the smallest percentage decline month-to-month.

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 January 2023 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 in both November and December. Shareholders who wished to redeem shares in January 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 a 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.

Chart II Blackstone REIT Sales

Chart III Starwood REIT Sales

Y-O-Y NTR Capital Raise Comparisons

Year-over-year comparisons show capital raised by reporting nontraded REITs was down 54%.

Table II

Nontraded BDC Capital Raise thru January 2023

Only two nontraded BDCs were raising funds and reported to Blue Vault for January 2023. Blue Owl Capital Inc. (formerly Owl Rock Capital Advisors) had $262.7 million in equity capital raised by two BDCs in January 2023, down 51% from the December total of $531.9 million. Blackstone’s nontraded BDC, Blackstone Private Credit Fund, was also raising capital but did not report its sales to Blue Vault. As of January 31, 2023, the Blackstone BDC’s aggregate NAV was $23.3 billion and the fair value of its investment portfolio was $48.7 billion. Quarterly capital raise for the two reporting nontraded BDCs since Q3 2021 are shown below thru January 2023 totals.

Chart IV Nontraded BDC Sales

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

Nine funds reported their capital raise for January 2022 to Blue Vault. Bluerock Total Income+ Real Estate Fund raised $97.4 million, down 51% from the $138.5 total for December. The nine funds that reported had total capital raise of $173.8 million, down 51% from the $355.1 million raised by 12 funds in December 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 January. Leading the group was listed BDC Prospect Capital with $41.0 million in preferred stock issuances, down 50.0% from the $82.1 million December total. Braemar Hotels & Resorts issued $26.6 million, down 22.5% from $34.3 million in December. Gladstone Land issued $0.22 million in nontraded preferred stock, down 97.8% from the December total of $10.0. For all five listed funds that issued nontraded preferred and reported to Blue Vault, the total was $76.5 million, down 45.7% from the December total of $141.0 million reported by the same funds.

Table IV

Sources:  SEC, Blue Vault