Monthly Reported NTR Sales Up 14% in July, Up 121% Y-O-Y
August 13, 2019 | James Sprow | Blue Vault
Reporting nontraded REITs booked capital raise of $856.4 million in July, up 14% from the $751.4 million total for June but up 3% from the $831.6 million monthly average for the same NTRs in Q2 2019. Blackstone REIT saw capital raise increase in July by 20%, but the total for all other reporting effective nontraded REIT offerings showed a decrease of 4%, from $191.2 million to $183.5 million, as Blackstone REIT’s share of total reported NTR sales increased from 74.6% in June to 78.6% in July.
Starwood REIT did not respond to requests for sales figures for July 2019, or for the first quarter and second quarters of 2019. Based on SEC filings, Blue Vault estimates that Starwood REIT had July sales of approximately $91 million, and sales for Q2 2019 of approximately $135 million. (The REIT’s Q2 2019 10-Q reports $134.0 million.) Based on shares outstanding it’s estimated that Starwood has raised over $500 million in its offering as of August 12, 2019. Also, based on shares outstanding as of June 30, it’s estimated that FS Credit Real Estate Income Trust was raising common equity at a pace of roughly $6.8 million per month in Q2 2019. Based upon SEC filings, Blue Vault estimates that Nuveen Global Cities REIT raised approximately $2.9 million in July. Phillips Edison Grocery Center REIT III did not report sales to Blue Vault for May and the REIT suspended its public offering effective June 14, 2019. Oaktree REIT has yet to report capital raise in its open offering. While total sales for the reporting REITs, without these five effective REITs, totaled $856.4 million, adding reasonable estimates for each could raise the industry’s July total above $950 million.
*The following NTRs would not provide sales data to Blue Vault: FS Credit Real Estate Income Trust, Starwood REIT, Nuveen Global Cities REIT, and Oaktree REIT.
With the Blackstone REIT July sales of $672.8 million, up 20% from sales in June of $560.2 million, the 14% increase in total capital raise month-to-month among reporting NTRs was due mainly to that REIT’s increase. Hines Global Income Trust increased its sales by 7.7% to $45.8 million, and Jones Lang Lasalle’s Income Property Trust saw sales rise 34.5% to $51.0 million.
In terms of ranking, after Blackstone REIT, the next NTR with $50.0 million and a 6.0% share was Jones Lang LaSalle Income Property Trust, followed by Hines Global Income Trust with $45.8 million for a 5.3% share. Black Creek Industrial REIT IV was fourth, with $23.5 million and a 2.7% share.
For the reporting sponsors of nontraded REIT offerings in July, Blackstone was first in capital raised with $672.8 million and a 78.6% share. Jones Lang LaSalle ranked second with $51.0 million and a 6.0% share of all reported NTR sales, followed by Hines Securities with $45.8 million and a 5.3% share. Black Creek Group, with two open programs, was next with $36.8 million for a 4.3% share.
Nontraded BDC Sales Rose 11% in July
Nontraded BDC sales rose 11.4% from $37.8 million in June to $42.1 million in July, with only three nontraded BDC programs raising funds in July 2019 compared to six in April 2018 and seven in February 2018. Owl Rock Capital Advisors again led nontraded BDC sponsors with sales of $40.3 million by its Owl Rock Capital Corporation II program, 96% of nontraded BDC sales in July, up 11% from its $36.4 million sales in June. MacKenzie Realty Capital was one of two other BDC programs raising capital with $1.75 million in sales for a 4.2% share in July, up 28% from its June sales of $1.37 million.
Nontraded Preferred Sales by Listed REITs
Blue Vault receives sales reports from three listed REITs that issue nontraded preferred shares. Nontraded preferred sales by these REITs totaled $33.1 million in July 2019, up from the $29.2 million total in June. Bluerock Residential Growth had sales of $22.31 million for July, increasing 17% from the $19.04 total for June. Gladstone Land Corp. reported nontraded preferred sales of $5.08 million for July, down from the $6.46 million in June. CIM Commercial Trust had nontraded preferred sales of $5.73 million in July, up 55% from June sales of $3.70.
At least one additional listed REIT issues nontraded preferred stock. Preferred Apartment Communities, Inc. does not report monthly preferred share sales to Blue Vault but SEC filings for Q2 2019 show proceeds of $123.9 million, before offering costs, from sales of units consisting of one share of Series A Redeemable Preferred Stock and one warrant to purchase up to 20 shares of Common. If the pace of preferred sales by this listed REIT continued in July 2019, the total for four listed REITs issuing nontraded preferred would exceed $70 million for the month.
Sources: Reporting NTRs and BDCs, SEC and Blue Vault
