April 2023 Reported Nontraded REIT Sales Down 40.7% from March 2023

May 31, 2023 | James Sprow | Blue Vault

Note: A previous version of this article did not include sales by Apollo Realty Income Solutions and thus understated reported April 2023 NTR sales. We apologize for the oversight.

Blue Vault received April 2023 sales totals for eleven nontraded REIT program offerings as of May 19, 2023. Sales reported by those eleven NTRs totaled $220.4 million, down 40.7% from $372.0 million in March, and down 64% Y-O-Y from the $607.4 million in sales in April 2022. FS Credit Real Estate Income Trust led the reporting REITs with $64.3 million in April, down 41.2% from $109.4 million in March. Next was Apollo Realty Income Solutions with $42.9 million in sales, up 2.1% from $42.0 million in March. Hines Global Income Trust was third with $29.0 million, down 12.4% from $33.1 million in March. Ares Industrial REIT raised $28.7 million, down 22.0% from $36.8 million in March. Nuveen Global Cities REIT raised $17.4 million, down 29.9% from $24.9 million in March. RREEF Property Trust and Apollo Realty Income Solutions were the only two REITs with increases in sales month-to-month.

Table I

All capital raise figures for these nontraded REITs include DRIP proceeds.

Chart I NTR Sales

Sales in the chart do not include capital raised by Blackstone REIT, Starwood REIT, Brookfield REIT, and Invesco REIT. Those four REITs raised an estimated $5.487 billion in Q1 2023 and raised capital with equity sales in April 2023 but did not report to Blue Vault. Blackstone REIT raised $5.29 billion (including DRIP) in Q1 2023, followed by Starwood REIT with $157.6 million, Brookfield REIT with $30.3 million and Invesco REIT with $13.0 million.

Estimated Common Stock Issuances by Blackstone REIT and Starwood REIT

Using the monthly 424b3 filings by Blackstone REIT and Starwood REIT, we can plot the estimated number of common shares issued by the two nontraded REITs. The data bridge two offerings for each REIT, so some discontinuity in the monthly totals may show up in the series. Blackstone REIT appears to have issued the most shares over the time period in March 2022, while Starwood REIT issued its highest total in December 2021. Both REITs reported significant drops in common share issuances over the last eight to eleven months. Both REITs have also been subject to a large volume of redemptions requests, reaching their monthly limits of 2% of total NAV in November and December 2022 and pro-rating the number of share redemptions fulfilled in November 2022 thru April 2023 in the case of Blackstone REIT. Shareholders who wished to redeem shares in April 2023 will have to re-submit their redemption requests each month as the pro-rated fulfillments reach monthly limits.

Chart II Blackstone REIT Sales

Chart III Starwood REIT Sales

Y-O-Y NTR Capital Raise Comparisons

Year-over-year comparisons show capital raised by reporting nontraded REITs was down 64%.

Table II

Nontraded BDC Capital Raise thru March 2023

Only two nontraded BDCs were raising funds and reported to Blue Vault for April 2023. Blue Owl Capital Inc. (formerly Owl Rock Capital Advisors) had $317.7 million in equity capital raised by two BDCs in April 2023, up 6.2% from the March total of $299.1 million. Blackstone’s nontraded BDC, Blackstone Private Credit Fund, was also raising capital but did not report its sales to Blue Vault. As of March 31, 2023, the Blackstone BDC’s fair value of its investment portfolio was $48.7 billion. Quarterly capital raise for the two reporting nontraded BDCs since Q1 2022 are shown below thru April 2023 totals.

Chart IV Nontraded BDC Sales

Interval and Tender Offer Fund Sales Reported to Blue Vault for March

A total of fourteen Interval Funds and Tender Offer Funds reported their capital raise for April 2023 to Blue Vault. Bluerock Total Income+ Real Estate Fund raised $51.6 million, down 54% from the $113.3 total for March. The 14 funds that reported had total capital raise of $221.1 million, down 35% from the $341.8 million raised by 13 funds in March 2023.

Table III

Listed REITs and BDCs with Nontraded Preferred Stock Issuances

Blue Vault has received sales reports from four listed REITs and a listed BDC that issued nontraded preferred stock in April 2023. Leading the group was listed BDC Prospect Capital with $35.6 million in preferred stock issuances, down 21.8% from the $45.5 million March total. Creative Media & Community Trust Corp increased their issuances 86.0% to $13.7 million from $7.4 million in March. Ashford Hospitality Trust issued $8.08 million, down 11.1% from $9.1 million in March. For all five listed funds that issued nontraded preferred and reported to Blue Vault, the total was $58.2 million, down 7.2% from the March total of $62.8 million reported by the same funds.

Table IV

Sources: SEC, Blue Vault