Northstar REIT II, Behringer Opp REIT I Total Returns Atrocious
February 6, 2019 | Stacy Chitty and James Sprow | Blue Vault
Following the recently released Nontraded REIT Full-Cycle Return summary from last week, which disclosed the total returns of the first 56 full-liquidity REIT events, Blue Vault is today releasing total return numbers for an additional eight nontraded REIT liquidity events. While there is strong performance from SmartStop’s Strategic Storage Growth Trust and W. P. Carey’s Corporate Property Associates 17-Global, two of the eight total returns were deficient, while two more of the eight, abysmal.
Strategic Storage Growth Trust’s early investors enjoyed an estimated annualized rate of return of 8.04% with the REIT’s merger into Strategic Storage Trust II on January 24, 2019. Corporate Property Associates 17-Global’s early investors received an estimated 6.72% annualized rate of return when the REIT merged with the listed W.P. Carey (“WPC”) on October 30, 2018, based on the closing price of WPC on November 1, 2018.
Behringer Harvard Opportunity REIT I reported a total liquidating value of $1.90 per share for shares that were originally issued at $10.00. Blue Vault estimates that early investors in the REIT experienced a negative 11.1% annualized return and late investors experienced an annualized rate of return of negative 13.7%. NorthStar Real Estate Income II provided a liquidating value of $7.16 to shareholders who invested at the $10.00 offering price. The REIT’s early investors had an estimated annualized rate of return of negative 0.43%. Investors in the last quarter of the REIT’s offering experienced an estimated annualized rate of return of negative 19.2%.
Related: List of total return results from Blue Vault's Nontraded REIT Full-Cycle Performance Study, 5th Edition
Blue Vault has released five editions of their industry-leading Nontraded REIT Full Cycle Performance Studies, with the latest 5th Edition released in early 2018. Since that time there have only been eight additional NTR full-cycle liquidity events. Their total return performance has not been reported in its entirety until now.
Blue Vault is the only independent nontraded REIT research firm providing leading analysis to financial advisors and RIAs about nontraded REIT and other alternative investment performance. The Nontraded REIT Full-Cycle Performance Studies not only report shareholder returns, but also use custom benchmarks to compare returns to traded REITs and institutional portfolios over matched holding periods.