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Nontraded REIT and BDC Sales Weaken in February 2017

March 13, 2017

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Nontraded REIT and BDC Sales Weaken in February 2017

March 13, 2017 | by James Sprow | Blue Vault

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Equity capital raised by open nontraded REIT programs in February 2017, appear to have fallen 15% from January 2017, according to sales figures reported to Blue Vault by REIT sponsors. For the 26 effective nontraded REITs reporting, sales for all share classes, including DRIP proceeds, totaled $231 million in February 2017, compared to $359 million in December 2016, and $273 million in January. A very significant new entrant, Blackstone Real Estate Income Trust, Inc., was not included in the reported totals. In a 424B3 filing with the SEC dated February 13, Blackstone reported total sales from the offering totaling $362 million to date. The REIT broke escrow as of January 1, 2017, with total sales of $279 million, indicating that 2017 sales through February 13, would be an estimated $83 million, likely making Blackstone REIT the top program for sales thus far in 2017.

According to reports from NTR sponsors that do not include Blackstone REIT, the top five programs raising equity capital in February 2017, were:

(Intentionally left blank)

 $      49,079,958

Strategic Storage Growth Trust, Inc.

 $      22,723,475

Griffin-American Healthcare REIT IV, Inc.

 $      22,619,911

Carter Validus Mission Critical REIT II, Inc.

 $      21,728,846

Hines Global REIT II, Inc.

 $      16,030,620

Reporting BDCs showed a 14% decrease in sales to $62.5 million in February from $72.4 million in January 2017. According to the reporting sponsors for BDCs, the top five programs raising equity capital in February 2017, were:

FS Investment Corporation III 

 $                  17,420,000

(Intentionally left blank)

 $                  16,024,386

FS Investment Corporation IV 

 $                    8,450,000

Corporate Capital Trust II, Inc.

 $                    7,891,841

HMS Income Fund, Inc.

 $                    6,230,062

Blue Vault compiles sales each month for nontraded REITs, BDCs, Closed End Funds, Private Placements and Interval Funds. Reported sales are verified each quarter for any program that files financial reports with the SEC. The reported figures are estimates based upon voluntary reports from product sponsors for February 2017.

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Gregory De Jong, CFP, Co-Founder of Paragon Advisors, LLC.
July 7, 2015

Blue Vault is just what advisors need to size up the different offerings in the nontraded REIT market. Just as importantly, it’s what the industry needs to encourage best practices among REITs.