Those continuously-offered nontraded REITs that reported their net asset values per share as of September 30, 2021, had a median monthly increase in those NAVs of 1.70% and an average increase of 2.12%. For 2021 YTD, the median increase in NAVs was 9.40% and the average was 8.10%. The largest increase in NAV per share YTD through September among those REITs was for Blackstone REIT’s Class I shares at 16.84%.
Chart I
For the 3rd Quarter of 2021, the median change in NAV per share was 4.29% and the average was 4.46%. The largest increase in NAV per share was for Oaktree REIT’s Class I shares at 9.33%.
Chart II
Chart III shows the total returns for September 2021 for continuously-offered nontraded REITs. Total returns are calculated as the sum of monthly changes in the NAVs per share for Class I shares (Class A for InPoint Commercial Real Estate Income that did not report for September, and Jones Lang LaSalle Income Property Trust and Class IX for Cantor Fitzgerald Income Trust) and the annualized distribution yield prorated monthly.
Chart III
When comparing the monthly total returns of the continuously-offered nontraded returns to total returns on the S&P 500 stock index, the differences in volatility are obvious. Since January 2020, the total return for the S&P 500 Index was 14.68%, compared to the median total return for the continuously-offered nontraded REITs of 15.07%. Importantly, the standard deviation of monthly returns for the S&P 500 index for the last 12 months was 4.04% compared to the standard deviation of the median continuously-offered nontraded REIT returns of 0.69%. Since January 2020, the S&P 500 has had negative returns in six out of 21 months, with the worst returns, of course, in March 2020 at the outset of the pandemic, with negative 12.35%. The S&P 500 return for September was negative 4.76%, the first negative return since January 2021.
Chart IV
For the individual continuously-offered nontraded REITs, the trade-off for risk, as measured by the standard deviations of returns for the last 18 months compared to the total returns, and the average total returns since inception, Chart V illustrates that there is a positive relationship between the risk measure and the average returns.
Chart V
Sources: SEC, individual REIT websites, Blue Vault
