Blue Vault December “Sales Stack” All Alternative Investment Sales
January 16, 2018 | Blue Vault
NTR Sales at $4.3 Billion for 2017, Down from $4.5 Billion in 2016
Sales by nontraded REITs were down 4.6% in 2017 compared to 2016. December sales of $271.2 million reported to Blue Vault by nontraded REIT sponsors were down from $317.6 million in November. Quarterly nontraded REIT sales for Q4 2017 were $881 million compared to $1,024 million in Q4 2016, a drop of 14% year-over-year. There were 20 sponsors raising capital for nontraded REIT programs in 2017 compared to 22 sponsors with offerings during 2016.
Blackstone REIT’s reported sales in 2017 were $1.872 billion, fully 44% of all NTR sales for the year. The Blackstone REIT sales constituted 63% of reported nontraded REIT sales in December, up from the 54% share of nontraded REIT industry sales in November. Blackstone’s share of total nontraded REIT sales was 55% for Q4 2017.
Clearly, the entry by Blackstone into the nontraded REIT sector had a huge impact on sales. Blackstone’s continuous offering with multiple share classes and monthly NAV per share updates is sold through wirehouses, bringing a major distribution channel to the sector. In addition to Blackstone’s nontraded REIT program which broke escrow on January 1, 2017, other products have been introduced by Cantor Fitzgerald, Starwood, and Nuveen. As AR Global, W.P. Carey and several other nontraded REIT sponsors have exited, these new programs could resuscitate an industry that has seen sales drop to the lowest levels in 15 years.
|Among leading sponsors with sales in the nontraded REIT sector in 2017 following Blackstone’s $1.87 billion were:|
|•||Carter Validus||$383.1 million|
|•||Griffin Capital||$370.8 million|
|•||Cole Capital||$273.1 million|
|•||Black Creek Group||$245.8 million|
|•||W. P. Carey||$243.4 million|
|•||SmartStop Asset Mgmt.||$220.5 million|
BDC sales reported in 2017 were $732.5 million, down 27% from $1.000 billion in 2016. Q4 2017 BDC sales were $160.8 million compared to $238.9 million in Q4 2016, down 33%. December 2017 BDC sales were $39.6 million compared to December 2016 BDC sales of $70.1 million. Just seven nontraded BDC sponsors were raising capital in December 2017, down from eight in December 2016.
Leading sponsors in the BDC sector for 2017 sales were FS Investments with $339.8 million, Owl Rock Capital Advisors at $90.8 million and W.P Carey with $70.7 million. Other BDC sponsors with sales in 2017 include CNL Financial Group at $62.6 million, CION Investments at $57.9 million, and Hines Securities with $44.7 million.
Sales by Interval Funds, Nontraded Closed-End Funds and Private Placements for December
Blue Vault reports sales for Interval Funds and nontraded Closed-End Funds reported by 12 fund sponsors. December sales for these funds that were reported to Blue Vault totaled $180.6 million, up 23.4% from the $146.3 million reported in November for the same sample of programs. The largest total sales reported by a sponsor of these products in 2017 was $869.9 million by Griffin Capital Corporation in their Griffin Institutional Access Real Estate Fund. This fund’s sales were 47% of total sales reported to Blue Vault for 2017 in the Interval Fund and nontraded Closed-End Fund sector. Blue Rock Capital’s Total Income (plus) Real Estate Fund was next in the Interval Fund category with $395.1 million raised in 2017.
|Among leading sponsors in Interval Funds and nontraded Closed-End Fund sales reported to Blue Vault in 2017 were:|
|•||Griffin Capital Corporation||$869.9 million|
|•||Bluerock Capital Markets, LLC||$395.1 million|
|•||Resource Real Estate||$173.5 million|
|•||Provasi Capital Partners||$101.6 million|
Sponsors reported Private Placement and Reg A sales of $261.1 million in December, up from $211.3 million reported by the same sponsors in December. Owl Rock Capital Advisors again led the group of reporting sponsors with $55 million in December, down from $60.2 million in November. Inland Real Estate Investment Corporation reported sales of $53.2 million in December, up from $40.6 million in November.
|Among leading sponsors in Private Placement and Reg A sales reported to Blue Vault in December were:|
|•||Owl Rock Capital Corporation||$55.0 million|
|•||Inland Real Estate Investment Corp.||$53.2 million|
|•||Passco Companies, LLC||$43.2 million|
|•||Exchange Right Real Estate||$30.0 million|
|•||Hamilton Point Investments, LLC||$29.9 million|
|•||AEI Capital Corporation||$12.0 million|
The total for Private Placement and Reg A sales reported to Blue Vault for 2017 was $3.547 billion, which included a large total from Owl Rock Capital Corporation in August of $1.37 billion, constituting 39% of the 2017 sales reported to Blue Vault for the year.
In October, Blue Vault began reporting sales of nonlisted preferred stock issued by Bluerock Capital Markets and CIM Commercial Trust. Those sales were $28.0 million in December, up from $20.9 million in November and $15.8 million in October.
I have been using Blue Vault Partners for the past five years. I have found them to be a valuable, unbiased resource when it comes to evaluating and comparing non-traded REITs. The reports help me analyze which sponsors are doing a responsible job of managing their offerings. This allows me to limit my REIT recommendations to only the most competitive products, and then track those REITs throughout their life cycle.