Real Estate Private Investment Alts Navigate Choppy Waters
May 15, 2023 | Beth Mattson-Teig | WealthManagement.com
Non-traded REITs and other private real estate investment alternatives have slammed headlong into some significant market challenges of late with higher interest rates and uncertain property valuations that have triggered a run of redemption requests. The sector also is facing new regulatory reforms, which if approved, could create additional fundraising hurdles for sponsors.
On the positive side, the space is continuing to grow with new entrants and new products aimed at capturing a bigger piece of the retail investor market. The latest industry fundraising data from Robert A. Stanger & Co. also holds good news. Total fundraising for alternative assets during the first quarter reached $16.2 billion. Despite continued pressure from redemption requests, non-traded REITs posted net positive fundraising for the quarter with $6.3 billion in new fundraising compared to $4.6 billion in redemption activity.
