The pace of nontraded REIT offering closings has accelerated significantly over the past six months. In fact, through June 2013, there have been a total of ten offerings that have closed to new investments compared to eight offerings that closed during all of 2012.
While some might have their concerns about this recent trend, these closings actually bode well for the industry as they signal a significant LifeStage transition towards portfolio maturation and planning for an ultimate liquidity event. These closings may also come as no surprise to others given that the industry experienced a spike in new offerings between 2009 and 2010 which have now reached the end of their three-year offering period.
In addition to the increase in the number of offering closings, the pace with which nontraded REITs are completing full-cycle events has also accelerated. In fact, for the four full-cycle events that have been completed year to date, the average number of months between the offering closing and the completion of a liquidity event was 30 months. This compares to an average of 53 months between the offering closing and the completion of a liquidity event for the four full-cycle events that were completed during 2012, and 60 months for the 17 nontraded REITs analyzed in our 2012 Nontraded REIT Full-Cycle Performance Study.
For more information regarding the long-term performance of nontraded REITs, new Blue Vault subscribers can enter promo code NTRFC12 to receive a free copy of last year’s full-cycle performance study prepared in collaboration with the University of Texas. In the coming weeks, we will also make an announcement regarding the release of our new 2013 study which will provide updated full-cycle performance results for approximately 24 nontraded REITs. Stay tuned…..
Blue Vault helps me to stay well informed on the financial status of both open and closed nontraded REITs and BDCs, so that I can help my clients better understand the product, before they make the decision to invest and after.