September Nontraded REIT Capital Raise
October 10, 2019 | James Sprow | Blue Vault
Blue Vault received September sales totals for 17 effective nontraded REIT program offerings as of October 10. Sales reported by those 17 NTRs totaled $148.5 million for September compared to the August total for the same sample of $168.5 million. This is a drop of 11.8% in sales for the same group of REIT offerings. Among the nontraded REIT offerings that had increases in capital raise between August and September, Nuveen Global Cities REIT’s raise increased from $0.47 million in August to over $10.3 million in September. SmartStop’s Strategic Student & Senior Housing Trust increased sales from $0.43 million in August to over $2.27 million in September. InPoint Commercial Real Estate Income transitioned from a private placement earlier in the year to a public offering and raised $1.95 million in September. Resource Apartment REIT III, Procaccianti Hotel REIT and Black Creek Diversified Property Fund all had double-digit percentage increases in sales for September. Of the 17 public offerings by nontraded REITs that have reported sales for September, nine programs had increases in sales and eight programs had decreases month-to-month. The nine NTRs with increases are shown in Table I.
For the third quarter of 2019, of the 17 programs reporting sales as of October 10, the offering by Jones Lang LaSalle Income Property Trust had the largest total in the quarter at $136 million. Next on the list was Hines Global Income Trust with $107 million, Black Creek Industrial REIT IV at $60 million and Black Creek Diversified Property Fund at $41 million. The top 10 among the REITs reporting as of October 10 are shown in Table II.
Those NTR programs that had the largest percentage increase in offering proceeds from Q2 2019 to Q3 2019 are shown in Table III. In terms of total dollar increases, Jones Lang LaSalle had the greatest increase, $27.3 million, from Q2 to Q3 2019.
For the NTRs that were raising funds in both 2018 and 2019 and reported sales for September 2019, Strategic Student & Senior Housing Trust, sponsored by SmartStop, had the largest percentage increase in sales for the nine-month year-to-date periods from 2018 to 2019, over 20X the 2018 period. Again, Jones Lang LaSalle Income Property Trust had the largest absolute increase in capital raise between the 9-month YTD periods in 2018 and 2019, increasing total sales by $227 million. Black Creek Industrial REIT IV had an absolute increase in sales for the two nine-month periods of $105 million, followed by Rodin Global Property Trust that increased capital raise by $51 million. The eight reporting NTRs that increased their public offering proceeds between 2018 and 2019 are shown in Table IV.
Other NTR programs raising funds in September 2019 that have yet to report their sales to Blue Vault as of October 10 include Blackstone REIT and Starwood REIT. Blackstone and Starwood raise most of their funds through wire houses.
Nontraded BDC Sales
Just two nontraded BDCs were raising funds in September 2019 and reported those sales to Blue Vault. Owl Rock Capital Corporation raised $35.1 million and MacKenzie Realty Capital raised $2.2 million. The total capital raise for those two BDCs in September was $37.3 million, down just 0.4% from the August total of $37.5 million. The increase by Owl Rock Capital Corporation II of $1.02 million was offset by the decrease in sales by MacKenzie Realty Capital of $1.19 million in the total. For the nine months YTD in 2019, Owl Rock has raised over $352.3 million and MacKenzie has raised $18.0 million. Triton Pacific’s TP Flexible Income Fund is a nontraded BDC that is expected to begin raising capital in Q4 2019.
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 $19.55 million in September through those issuances, up slightly from the $19.63 million in issuances in August 2019. For the year-to-date, the REIT has reported a total of $156.7 million through the issuance of nontraded preferred stock, an average of $17.4 million per month. Gladstone LAND Corp. raised $5.98 million in September, down from $8.82 million in August, and has raised $56.9 million YTD. CIM Commercial Trust (CMCT) raised $4.09 million in September though preferred stock issuances, up from $2.36 million in August. For 2019 YTD, the listed REIT has raised a total of $31.1 million via the nontraded preferred issuances.
