Nontraded REIT Portfolios Shrink As Redemptions Rise

New Investment Activity Has Been Dormant for Seven Months

By Mark Heschmeyer and Nicole Shih

CoStar News reviewed Securities and Exchange Commission filings of eight private REITs that had monthly net property investment values of more than $1 billion each as of March. Those eight REITs — Blackstone Real Estate Income Trust, Starwood Real Estate Income Trust, Ares Industrial Real Estate Income Trust, Ares Real Estate Income Trust, Hines Global Income Trust, Nuveen Global Cities REIT, Brookfield Real Estate Income Trust and Cantor Fitzgerald Income Trust — had combined portfolios totaling $165.2 billion at the end of March. That total had shrunk by $2.4 billion since August.

The drop in property portfolio values began in September about the time the largest of the nontraded REITs, Blackstone REIT, reported it was beginning to see an increased call for share repurchases.

By November, many of the nontraded REITs reviewed saw their redemptions greatly exceed monthly and quarterly limits. At the same time, new fundraising by nontraded REITs sank to monthly lows not seen since August 2020, according to data from investment banking firm Robert A. Stanger & Co.

The lack of major new investments also came after the Federal Reserve had increased the federal funds borrowing rate six months in row from March through August. It was raised another seven consecutive months through March.

As of the end of March, the eight REITs reported holding more than $2.93 billion in cash and cash equivalents.

Nontraded REIT Portfolios Shrink As Redemptions Rise
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