October Nontraded REIT Capital Raise

November 11, 2019 | James Sprow | Blue Vault

Blue Vault received October sales totals for 17 effective nontraded REIT program offerings as of November 10. Sales reported by those 17 NTRs totaled $167.2 million for October compared to the September total for the same sample of $154.6 million. This is an increase of 8.1% in sales for the same group of REIT offerings. Among the nontraded REIT offerings that had increases in capital raise between September and October, Black Creek Industrial REIT IV’s raise increased from $6.73 million in September to over $13.69 million in October, a 103% increase. Moody National REIT II increased sales from $4.31 million in September to $6.90 million in October, an increase of 60%. InPoint Commercial Real Estate Income transitioned from a private placement earlier in the year to a public offering and raised $3.06 million in October, a 57% increase from $$1.95 million in September. Rodin Global Property Trust, Black Creek Diversified Property Fund, Jones Lang LaSalle Income Property Trust and Hines Global Income Trust all had double-digit percentage increases in sales for October. Of the 17 public offerings by nontraded REITs that have reported sales for October, eight programs had increases in sales and nine programs had decreases month-to-month. The eight NTRs with increases are shown in Table I.

Table I

For the year-to-date through October 2019, of the 17 programs reporting sales as of November 10, the offering by Jones Lang LaSalle Income Property Trust had the largest total for the 10 months at $363.8 million. Next on the list was Hines Global Income Trust with $343.4 million, Black Creek Industrial REIT IV at $241.7 million and Black Creek Diversified Property Fund at $161.2 million. The top 10 among the REITs reporting as of November 10 are shown in Table II.

Table II

For the NTRs that were raising funds for 10 months in both 2018 and 2019 and reported sales for November 2019, Jones Lang LaSalle Income Property Trust had the largest percentage increase in sales for the ten-month year-to-date periods from 2018 to 2019, increasing over 234% from the 2018 period. Again, Jones Lang LaSalle Income Property Trust had the largest absolute increase in capital raise between the ten-month YTD periods in 2018 and 2019, increasing total sales by $255 million. Black Creek Industrial REIT IV had an absolute increase in sales for the two ten-month periods of $99.9 million, followed by Rodin Global Property Trust that increased capital raise by $49.7 million. The seven reporting NTRs that increased their public offering proceeds for the same 10-months between 2018 and 2019 are shown in Table III.

Table III

Other NTR programs raising funds in October 2019 that have yet to report their sales to Blue Vault as of November 10 include Blackstone REIT, Griffin Essential Asset REIT, and Starwood REIT. Blackstone and Starwood raise most of their funds through wirehouses.

Nontraded BDC Sales

Just three nontraded BDCs were raising funds in October 2019 and reported those sales to Blue Vault.  Owl Rock Capital Corporation raised $56.7 million and MacKenzie Realty Capital raised $2.3 million. Triton/Prospect’s TP Flexible Income Fund raised $0.35 million. The total capital raise for those three BDCs in October was $59.1 million, up 58.4% from the September total of $37.5 million. The increase by Owl Rock Capital Corporation II of $21.6 million was responsible for all but $175 thousand of the increase for the nontraded BDCs. For the ten months YTD in 2019, Owl Rock has raised over $409 million and MacKenzie has raised $20.35 million. Triton Pacific’s TP Flexible Income Fund is a nontraded BDC that is just beginning to raise capital.

Nontraded Preferred Sales by Listed REITs

Bluerock’s Bluerock Residential Growth REIT (NYSE: BRG) is a listed REIT that issues nontraded preferred stock. The REIT raised $27.27 million in October through those issuances, up from the $19.55 million in issuances in September 2019.  For the year-to-date, the REIT has reported a total of $184 million through the issuance of nontraded preferred stock, an average of $18.4 million per month. Gladstone LAND Corp. raised $6.08 million in October, up from $5.98 million in September, and has raised $62.95 million YTD. CIM Commercial Trust (CMCT) raised $3.80 million in October through preferred stock issuances, down from $4.09 million in September. For 2019 YTD, the listed REIT has raised a total of $34.9 million via the nontraded preferred issuances.