Non-Traded REIT Redemptions Exceed 350% of Fundraising in February
From the desk of Jim Eccleston at Eccleston Law
Fundraising among non-traded real estate investment trusts has dipped to $489 million in February 2023, which constitutes the lowest point since August 2020. Further, monthly redemptions have surpassed $1.7 billion, which amounts to 351% of fundraising as well as 1.6% of reported net asset value for the industry, according to a report released by Robert A. Stanger & Co.
Fundraising for the industry has totaled only $5.1 billion for the year-to-date period that ended on February 28, 2023. “The [non-traded REIT] industry deserves high marks for its commitment to providing liquidity to investors at levels never seen before”, according to Stanger chairman Kevin Gannon. Stanger’s report focuses on fundraising of all alternative investments offered to retail purchasers including publicly registered non-traded REITs, non-traded business development companies, interval funds, non-traded preferred stock of traded REITs, Delaware statutory trusts, opportunity zone funds, and other private placement offerings.
Year-to-date 2023 retail alternative investment fundraising amounted to $11.2 billion through February, paced by NAV REITs at $5.1 billion, interval funds at $2.6 billion, non-traded BDCs at $1.3 billion, and Delaware statutory trusts at $1.0 billion. Non-traded REITs have raised more than $5.0 billion year-to-date; Blackstone Group leads 2023 fundraising with $4.4 billion, followed by FS Investments with $146.6 million, Starwood with $100.0 million, Ares Real Estate Group with $72.6 million and Hines with 60.3 million.
Eccleston Law LLC represents financial advisors and investors nationwide in securities, employment, transition, regulatory and disciplinary matters.
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