July 2020 Nontraded REIT Capital Raise Drops, Nontraded Preferred Issuances Increase

August 12, 2020 | James Sprow | Blue Vault

Blue Vault received July sales totals for 12 effective nontraded REIT program offerings as of August 10. Sales reported by those 12 NTRs totaled $76.05 million compared to $86.63 million for June, a decrease of $10.58 million, or 12%. Four additional nontraded REITs have previously suspended their offerings or did not report sales for June (Griffin Capital Essential Asset REIT, InPoint Commercial Real Estate Income, Moody National REIT II, and Strategic Storage Trust IV).

Of the 12 reporting NTRs, Cantor Fitzgerald Income Trust, formerly known as Rodin Global Property Trust, along with Hines Global Income Trust, reported the largest one-month increases in capital raised.  Hines Global Income Trust had the largest increase, over $7.0 million for a 155.9% surge, from $4.5 million in June to $11.5 million in July, while Cantor Fitzgerald Income Trust’s sales increased 134% or $2.7 million, from $2.0 million in June to $4.7 million in July. 

Black Creek Industrial REIT IV, which almost singlehandedly led the 17 reporting REITs in Q1 2020 to a huge quarter by raising $623.3 million of the $1.212 billion total raised, had $32.5 million in sales in July, up slightly from $31.6 million in June.  The REIT benefitted in Q1 2020 from reinvestment of proceeds from the sale of almost all Black Creek’s Industrial Property Trust portfolio to Prologis in January 2020.  For the 11 REITs that reported sales to Blue Vault for both July 2019 and July 2020, the total sales for July 2019 was $161.8 million compared to $73.5 million in July 2020, a decrease of $88.3 million. 

Other REITs with monthly increases in sales were CIM Income NAV with a 106% jump from $0.496 million in June to $1.022 million in July.  Black Creek Diversified Property Trust had a small increase of $0.93 million from $31.60 million in June to $32.53 million in July.  A large month-to-month decrease was reported by Rodin Income Trust, from $0.302 million in June to just $0.027 million in July.  Nuveen Global Cities REIT and Jones Lang LaSalle Income Property Trust both reported decreases of over 62% from June to July.  RREEF Property Trust reported a drop of 55%, from $3.12 million in June to $1.40 million in July. Black Creek Diversified Property Trust’s sales dropped 21%, from $6.3 million to $5.0 million. 

The total sales by the 12 reporting REITs for July of $76.1 million was just below the average sales per month in Q2 2020 of $79.3 million.  In that quarter, May sales were just $58.4 million, rebounding to $86.6 million in June. 

Table I

Nontraded BDC Sales

Just two nontraded BDCs were raising funds in July 2020 and reported those sales to Blue Vault. Owl Rock Capital Corporation II raised $16.33 million, up 28.7% from $12.69 million in June. MacKenzie Realty Capital reported nontraded BDC sales in June of $0.036 million, down 37% from $0.115 million in June. Triton/Prospect’s TP Flexible Income Fund did not report sales for July.  The total capital raise reported by three nontraded BDCs for July 2020 was $16.37 million compared to $12.83 million reported by those same BDCs for June.

Nontraded Preferred Stock Issued by Listed REITs

Five listed REITs reported their nontraded preferred stock issuances in July to Blue Vault, and unlike the nontraded REIT sales, the trends overall were positive. Bluerock Residential Growth REIT issued $20.77 million of its preferred stock in July, up 52% from $13.63 million in June. CIM Commercial Trust issued $3.62 million of its nonlisted preferred in July, down 50% from its June total of $7.29 million. Preferred Apartment Communities issued $14.54 million in PAC Preferred A1 and M1 shares in July, up 4.6% from the $13.90 million issued in June. Gladstone LAND and Gladstone GOOD issued a total of $3.35 million in nontraded preferred in July, up from $2.57 million in June. Altogether, the five listed REITs issued $42.3 million in nontraded preferred shares in July, up 13% from the total for the same REITs of $37.4 million in June.