November 2020 Nontraded REIT Capital Raise Decreases 31% for Reporting Offerings

December 10, 2020 | James Sprow | Blue Vault

Blue Vault received November sales totals for 13 effective nontraded REIT program offerings as of December 8. Sales reported by those 13 NTRs totaled $116.68 million compared to $169.89 million for September, a decrease of $53.21 million, or 31%. Three additional nontraded REITs have previously suspended their offerings or did not report sales for November (Griffin Capital Essential Asset REIT, Moody National REIT II, and Strategic Storage Trust IV).

Black Creek Industrial REIT IV’s offering led the 13 reporting NTRs with sales of $43.54 million, down from $43.68 million in October, bringing the REIT’s 11-month total sales to $934.63 million, up 345% from the first 11 months of 2019 when the REIT raised $271.17 million. FS Investments raised $17.35 million for its FS Credit Real Estate Income Trust, up 3.1% from its October total of $16.83 million. Jones Lang LaSalle raised only $16.67 million, down 75.8% from the $68.78 million in October.   Black Creek Diversified Property Fund raised $10.86 million, up 25.0% from its $8.69 million in October.  All sales reported include distributions reinvested in shares of the REIT (DRIP).

Table I shows month-to-month comparisons for those REITs reporting sales for November.

Table I

Table II shows November Y-O-Y comparisons for 18 nontraded REITs that have reported sales either in November 2019 or November 2020, or both.  The largest Y-O-Y increases among those REITs that were raising capital in November 2020 were for Black Creek Industrial REIT IV (up 48%) and Nuveen Global Cities REIT (up 27%).

Table II

Nontraded BDC Sales

Just one nontraded BDC was raising funds in November 2020 and reported sales to Blue Vault. Owl Rock Capital Corporation II raised $19.55 million, down 10.5% from $21.83 million in October. MacKenzie Realty Capital reported nontraded BDC sales in October of $48,700 but did not report sales for November.  Triton/Prospect’s TP Flexible Income Fund reported sales for October of $25,000 but did not report sales for November.  The total capital raise reported by three nontraded BDCs for November 2020 was $19.55 million, all by Owl Rock Capital Corporation II compared to $20.93 million reported by three BDCs for October, a decrease of 6.6%.

Nontraded Preferred Stock Issued by Reporting Sponsors

Six listed REITs reported their nontraded preferred stock issuances in November to Blue Vault. Bluerock Residential Growth REIT issued $18.62 million of its preferred stock in November, down 33.9% from $28.16 million in October. CIM Commercial Trust issued $3.69 million of its nonlisted preferred in November, up from its October total of $3.01 million. Preferred Apartment Communities issued $15.69 million in two series of preferred shares in November, down 7.2% from the $16.90 million issued in October. Gladstone LAND and Gladstone GOOD issued a total of $6.61 million in nontraded preferred in November, up from $3.67 million in October. Prospect Capital issued $1.38 million of nontraded preferred in November, down 31.0% from $2.00 million issued in October.  Altogether, the six companies reported issuing $45.99 million in nontraded preferred shares in November, down 14.4% from the total for the same listed REITs of $53.73 million in October.

Table III

Source:  Blue Vault