What Blackstone, Inland Moves Mean for Non-Traded REITs
August 29, 2016 | by Jilliene Helman | Commercial Property Executive
Investors will likely benefit from more efficient distribution channels and attractive fee structures, contends RealtyMogul’s Jilliene Helman.
I’m always excited by stories highlighting the powerful ways that internal and external market forces can transform previously untouchable industries. A few weeks ago, Inland Real Estate Investment Corp., a prominent sponsor of non-traded REITs, announced that it would be eliminating all real estate-related transaction fees for its current and future non-traded REITs–a move that could potentially shift millions of dollars from Inland’s revenue line right into investors’ pockets.
Just one day later, Blackstone announced it would be launching its own (first) non-traded REIT, seeking to raise $5 billion from individual investors. Adding intrigue to the news is that Blackstone plans to forego the more traditional distribution channels typically used in the non-traded REIT industry, such as independent broker-dealers, in favor ofalternative, less popular means like Registered Investment Advisors (RIAs) and wirehouse platforms.
All this comes at a time when fundraising for non-traded REITs is actually plummeting asregulatory pressure, new rules, increased transparency requirements and recent scandals are hurting sponsors across the board.
So what am I taking away from this news? Here are a few thoughts: