NTR Sales at $271 Million in January, Dominated by Blackstone REIT

February 12, 2018

NTR Sales at $271 Million in January, Dominated by Blackstone REIT

February 12, 2018 | by James Sprow | Blue Vault

Sales by nontraded REITs reported to Blue Vault for January totaled $271 million, almost exactly equal to $271 million in December 2017. Blackstone REIT reported sales of $163 million in January 2018, comprising 60% of all nontraded REIT sales for the month. Sales were approximately $634 million in January 2017, but comparisons to the year-earlier January 2017 sales are less meaningful because that month’s totals were distorted by the one-time crediting of all Blackstone REIT’s sales in 2016 to the January 2017 totals when the REIT broke escrow as of January 1, 2017. (As of January 1, 2017, Blackstone REIT had net proceeds from their public offering of $279 million which were released from escrow and therefore booked to January 2017 sales.) There were 17 sponsors raising capital for nontraded REIT programs in January 2018 compared to 20 sponsors raising capital for nontraded REIT programs during 2017, and 22 sponsors with offerings during 2016.

Blackstone REIT’s 60% market share in January was down only slightly from 63% in December. Blackstone REIT’s reported sales in 2017 were $1.872 billion, or 44% of all NTR sales for the year. Blackstone’s share of total nontraded REIT sales was 55% for Q4 2017.

New nontraded REIT offerings that have yet to report significant sales or have yet to break escrow include FS Credit Real Estate Income Trust (sponsored by Franklin Square Holdings and declared effective in December), Starwood Real Estate Income Trust (sponsored by Starwood Capital Group and declared effective in December), and Nuveen Global Cities REIT (sponsored by Nuveen LLC and declared effective January 31, 2018).

Blackstone REIT’s distribution through wirehouses and the new offerings from Starwood, Franklin Square and Nuveen hold the potential to revive the nontraded REIT sector that saw sales in 2017 drop to the lowest level in 15 years.

Other leading sponsors with sales in the nontraded REIT sector in January, following Blackstone’s $163 million, were:

  Griffin Capital Company $21.5 million
  Jones Lang LaSalle $14.9 million
  Black Creek Group $14.7 million
  CIM Group (formerly Cole) $14.6 million
  Carter Validus $12.1 million
  SmartStop Asset Management $6.8 million
  Stira Capital Markets Group (formerly Steadfast) $5.2 million
  Resource $4.7 million

BDC sales reported in January were $27.8 million, down 62% from the year-earlier sales of $72.4 million in January 2017, and down 30% from the $39.6 million sold in December 2017. The leading sponsor of nontraded BDCs reporting sales in January was Owl Rock Capital Advisors with sales of $17.3 million, followed by CION at $3.9 million and NexPoint Capital/Highland Capital Management and Terra Capital Partners with $2.4 million each.

Seven nontraded BDC sponsors were raising capital in January 2018, down from eight in November 2017. FS Investments closed two nontraded BDC offerings in November 2017.

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.

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Derek Hayes
Blue Vault's Services
April 14, 2016

BlueVault saves a lot of time and effort in obtaining good numbers for analysis and provides good insights to compare against my own.