Inside the Vault

April 10, 2019

Which nontraded REIT program met the minimum offering requirement as of December 21, 2018, and had approximately $165 million released from escrow?

Answer: Starwood Real Estate Income Trust, Inc. broke escrow as of December 21, 2018. The nontraded REIT had 9,560,175 common shares outstanding as of February 28, 2019, and a total net asset value of $193,259,539 as of that date.

April 3, 2019

Which nontraded REIT made its final liquidating distribution on March 7, 2019?

Answer: American Realty Capital Healthcare Trust III, Inc. made a final liquidating distribution to its common shareholders on March 7, 2019, of $2.29 per share. On January 9, 2018, the Company paid an initial liquidating...

March 28, 2019

Deferred financing costs are amortized over the maturities of nontraded REIT debt financing. What is the range of annualized cost of debt financing that these expenses add to the weighted average cost of debt financing (calculated based upon the stated interest rates for mortgages and other financing)?

Answer: The additional annualized deferred financing costs can add anywhere from 0.05% to 1.44% to the annualized cost of debt financing. For a sample of 38 nontraded REITs with deferred financing costs, the average additional cost of borrowing was 0.36% annualized, added to the weighted average cost of debt of 4.33% for a total average cost…

March 21, 2019

What was Stephen A. Schwarzman’s (CEO of Blackstone Group, the sponsor of Blackstone Real Estate Income Trust, Inc., a nontraded REIT) estimated net worth as of 2019?

Answer: According to Forbes, Mr. Schwarzman’s estimated net worth was $13.3 billion as of February 25, 2019. The son of a dry goods store owner, he founded private equity firm Blackstone with fellow billionaire Peter Peterson in 1985. He has pledged or given away $350 million to Yale University, New York Public Library and others.…

March 8, 2019

Bluerock Total Income+ Real Estate Fund, an Interval Fund, surpassed $1 billion in assets in 2018. According to its 2018 annual report, how did the volatility of the fund’s share values compare to the volatility of the leading stock and public REIT indices?

Answer: The fund, since inception in October 2012, has recorded approximately 90% lower volatility than leading stock and public REIT indices. The fund has paid 23 consecutive quarterly distributions and its latest distribution is equivalent to a 5.25% annualized rate based on the September 26, 2018 record date NAV of $30.27 per share, and an…

February 14, 2019

As of October 31, 2018, the date with the most recently filed semi-annual and annual statements, how many interval funds had net assets in excess of $1.0 billion?

Answer: Eight interval funds had net assets in excess of $1.0 billion, led by Stone Ridge Trust II ($6.0 billion), Stone Ridge Trust V ($3.5 billion), ACAP Strategic Fund ($3.3 billion), Griffin Institutional Access Real Estate Fund ($2.6 billion), and Versus Capital Multi-Manager Real Estate Income Fund ($2.5 billion).

February 7, 2019

Which nontraded REIT has grocery-centered retail properties that have anchor tenants Publix (61) and Kroger (39) among the tenants in its estimated 340-property portfolio?

Answer: Phillips Edison & Company's tenants include Publix, Kroger, UPS Store, Subway, Starbucks, and Great Clips.

January 31, 2019

Which Business Development Company (“BDC”) had investments in the common stock of at least 25 different nontraded REITs as of September 30, 2018, with a total cost basis of over $22 million?

Answer: MacKenzie Realty Capital, Inc., a nontraded BDC, owned common shares in at least 25 different nontraded REITs as of September 30, 2018. The cost basis of the 19 million shares was $22.6 million as of September 30, 2018, with an estimated fair value of $25.2 million. The BDC’s largest investment among the nontraded REITs…