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October NTR Sales Up 14.4% From September, Nontraded BDC Sales Jump as Well

November 14, 2018

October NTR Sales Up 14.4% From September, Nontraded BDC Sales Jump as Well

November 13, 2018 | James Sprow | Blue Vault

Blackstone REIT increased capital raise in October by 22.5%, pulling the sector up by 14.4%, while the total for all other programs was relatively flat. With the Blackstone REIT October sales of $281.5 million, up from sales in September of $229.8 million, the entire rise in capital raise month-to-month among NTRs was due to the Blackstone increase. The total capital raise for nontraded REITs without Blackstone REIT in October was $133.6 million, compared to $133.0 million for the same REITs in September, an increase of just 0.5%. After Blackstone REIT, the leading REIT program in capital raise in October was Griffin-American Healthcare REIT IV, Inc., with sales of $21.6 million. Jones Lang LaSalle Income Property Trust, Inc. was next with sales of $21.2 million. The Jones Lang LaSalle IPT total was up 128% from the September total of $9.3 million.

Other nontraded REITs with significant capital raise in October were: Black Creek Industrial REIT IV with $18.4 million; Black Creek Diversified Property Fund with $14.4 million; Cole Real Estate Income Strategy (Daily NAV), Inc. with $13.4 million; and Hines Global Income Trust, Inc. with $8.4 million.

Among the sponsors of nontraded REIT offerings, Blackstone was first with $281.5 million, Black Creek Group, with two open programs was next with $32.5 million raised, followed by Griffin Capital Company with two programs totaling $23.4 million. Jones Lang LaSalle was next with $21.2 million. CIM Group (formerly Cole Capital) raised $15.9 million. Many industry insiders believe that approximately 90% of Blackstone REIT’s sales are coming via wirehouses. Blue Vault has asked Blackstone to report the breakdown by channel but as yet Blackstone has not been responsive to these requests. Of all the industry’s Class S sales, Blackstone’s share was over 94% in Q3 2018, and the REIT’s share of Class I sales for Q3 2018 was 81%.

One new nontraded REIT reporting sales in October was Procaccianti Hotel REIT Inc. with sales of approximately $225,000. On August 31, Steadfast Apartment REIT III, Inc., suspended its public offering after raising gross offering proceeds of approximately $206.6 million, including $7.5 million in DRIP proceeds.

Among those REITs with significant increases in capital raised between September and October, the largest percentage increase was achieved by Jones Lang LaSalle Income Property Trust, Inc. from $9.3 million in September to $21.2 million in October, an increase of 128%. Hines Global Income Trust increased sales from $5.9 million in September to $8.4 million in October, a 42% increase.

Nontraded BDC Sales Double in October
Nontraded BDC sales increased from $28.3 million in September to $57.2 million in October, an increase of 102%, with only three nontraded BDC programs raising funds in October compared to six in April and seven in February. August sales were $42.6 million for the same three programs. Owl Rock Capital Advisors again led nontraded BDC sponsors with sales of $46.6 million by its Owl Rock Capital Corporation II program, 81% of all nontraded BDC sales in October, and up 77% from its $26.3 million sales in September. CION Investment Corporation reported sales of $8.2 million in October, 14% of nontraded BDC sales for the month, and up from less than $0.7 million in September. MacKenzie Realty Capital was a distant third with $2.5 million in sales for a 4.4% share of all BDC sales, but with October sales 83% higher than in September.

For Q3 2018, total BDC sales were $97.8 million, down 7.2% from $104.8 million for Q2 2018, but 4.1% higher than the $94.0 million sales in Q1 2018. October nontraded BDC sales for one month were over 58% of sales for the entire Q3 2018, a sign that, at least for three BDC programs, the trend is up.

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