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Which previously nontraded REIT completed its full liquidity event when its last tranche of common shares were converted to listed shares on January 9, 2019?

Which previously nontraded REIT completed its full liquidity event when its last tranche of common shares were converted to listed shares on January 9, 2019?

January 16, 2019

American Finance Trust, Inc. (“AFIN”) announced on December 20, 2018, that all issued and outstanding shares of its Class B-2 common stock would automatically convert into shares of its Class A common stock on January 9, 2019.  Class A shares trade on the Nasdaq under the ticker symbol AFIN.  The Class B-2 shares represent approximately 25% of AFIN’s total outstanding shares. As of the conversion date, 100% of AFIN’s common shares became tradeable, completing its full liquidity event.

Which sponsor of a nontraded REIT has been investing in real estate since 1934 and had $988 billion in assets under management, including $45 billion in U.S. real estate as of September 30, 2018?

January 10, 2019

Nuveen Global Cities REIT is sponsored by Nuveen. The REIT is currently offering up to $5 billion of common stock in a perpetual life offering, featuring monthly Net Asset Values (NAVs). The public offering includes four share classes (T, S, D, and I shares). Teachers Insurance and Annuity Association of America (“TIAA”) is the ultimate parent company of TIAA Global Asset Management/Nuveen.

Which previously nontraded REIT is now listed on the Nasdaq Global Select and will have the final tranche of its common stock converted to listed stock on January 15, 2019?

December 12, 2018

Answer: American Finance Trust (AFIN) listed a portion of its outstanding shares on the Nasdaq on July 19, 2018, and the final portion of its common shares (Class B-2) will convert to Class A shares on January 15, 2019. The shares reached a high of $17.76 on September 20 and recently traded at $13.77 per share.

Which two traded REITs are issuing nontraded preferred stock and sold over $14 million in nontraded preferred stock in September 2018 and over $109 million year-to-date through September 2018?

October 24, 2018

Answer:  Bluerock Residential Growth REIT and CIM Commercial Trust (CMCT) together raised over $14 million by issuing nontraded preferred stock in September 2018 and together have raised over $109 million through the issuance of nontraded preferred stock year-to-date through September 2018.

What bank rate is the basis for most variable rate debt utilized by nontraded REITs and what will happen in 2021 to change the reference rate for variable rate debt and interest rate swaps?

October 17, 2018

Answer:  Currently, most variable rate debt utilized by nontraded REITs have interest rates based upon LIBOR, the London Interbank Offered Rate. In April 2018, the New York Federal Reserve began publishing the Secured Overnight Financing Rate (SOFR), a rate that regulators hope will eventually be adopted to back U.S. dollar-based derivatives and loans. The head of Britain’s financial markets regulator said last year that a LIBOR substitute must be in place for banks to use by the end of 2021 and that LIBOR must because there are not enough transactions underpinning the rates.

Which two nontraded REIT sponsors ranked second and third in total capital raised by two programs each in both August and September 2018, after Blackstone REIT’s continuous offering?

October 10, 2018

Answer: Black Creek Group’s Black Creek Industrial REIT IV and Black Creek Diversified Property Fund gave the sponsor its second place ranking among nontraded REIT sponsors. Griffin Capital’s Griffin Capital Essential Asset REIT II and Griffin-American Healthcare REIT IV gave the sponsor its third place ranking in both August and September among nontraded REIT sponsors.

Where are U.S. $100 bills being held?

October 2, 2018

Where are U.S. $100 bills being held?             Answer: According to Federal Reserve estimates, $80 billion is held in domestic depository institutions, $453 billion is held by domestic businesses and individuals, and $1.07 trillion is held abroad.

How many nontraded REITs reported an increase in EBITDA between Q1 2018 and Q2 2018?

September 18, 2018

Answer:  Of the 63 nontraded REITs reporting EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for Q2 2018, 42 reported increases. The 63 REITs had total EBITDA of $1.32 billion for Q2 2018, up about 2% from the $1.29 billion for Q1 2018. The REIT reporting the highest EBITDA for Q2 2018 was Hines Global REIT, Inc., with $88.92 million, followed by Blackstone REIT with $82.04 million.

How many nontraded REITs have acquired light industrial properties since January 2018?

August 30, 2018

Answer: Five nontraded REITs have completed ten transactions to acquire warehouse/distribution centers encompassing a combined 25.3 million square feet of leasable area. The REITs and the number of transactions include Black Creek Industrial REIT IV (3), RREEF Property Trust (3), Griffin Capital Essential Asset REIT (2), Cole Real Estate Income Strategy (Daily NAV) (1), and Blackstone REIT (1).

Which nontraded REIT had the highest percentage of its distributions reinvested pursuant to its distribution reinvestment program in Q2 2018?

August 28, 2018

Answer:  JLL Income Property Trust Inc. had the highest percentage of its distributions reinvested in Q2 2018 at 65%.  Other REITs with a high percentage of distributions reinvested:  Hartman vREIT XXI, Inc. (63%), Blackstone REIT, Inc. (62%), Resource Real Estate Opportunity REIT, Inc. (61%), CNL Healthcare Properties II, Inc. (59%) and Black Creek Industrial REIT IV Inc. (58%).

Which four nontraded REITs have very low vulnerability to rising interest rates?

August 8, 2018

Answer: These four nontraded REITs have very low vulnerability to rising interest rates because they each have less than 10% of debt maturing in 2018 or 2019 and less than 10% of total debt at unhedged variable interest rates as of March 31, 2018: American Realty Capital New York City REIT, Inc.; Highlands REIT, Inc.; Inland Residential Properties Trust, Inc.; and Rodin Global Property Trust, Inc.

According to a filing with the SEC, what is the name of a limited partnership in Israel that owns over $100 million in nontraded REIT shares in the United States and recently concluded a tender offer for shares of Cole Office & Industrial REIT (CCIT II), Inc.?

August 1, 2018

Answer: Comrit Investments Ltd. is a real estate investment fund that was formed in 2015 and currently owns over $100 million in nontraded REIT securities in the United States. On July 30, 2018, the company accepted 56,691 Class A shares that were tendered and following the purchase of all of the tendered shares will own an aggregate of approximately 667,217 Class A shares in the REIT.

Which nontraded REITs have listed a portion of their common shares and delayed the listing of the remaining shares for up to 18 months to reduce potential selling pressure on the first listing date?

July 25, 2018

Answer: Whitestone REIT in 2012; Inland Western Retail Real Estate Trust, Inc. in 2013; Healthcare Trust of America, Inc. in 2013; Catchmark Timber Trust, Inc. (formerly Wells Timerland REIT, Inc.) in 2015; and American Finance Trust, Inc. in 2018.

On July 19, 2018, American Finance Trust, Inc. listed only Class A shares, with Class B-1 and Class B-2 to become Nasdaq-listed Class A shares in 90 and 180 days, respectively.

What is the median debt ratio for open and closed nontraded REIT programs?

July 19, 2018

Answer: The median debt ratio for all open nontraded REIT programs as of March 31, 2018, was 39%, compared to a median debt ratio of 45% as of March 31, 2017.  The median debt ratio for all closed nontraded REIT programs as of March 31, 2018, was 51%, compared to a median debt ratio of 48% as of March 31, 2017.