The Blackstone Group Inc. logged the largest annual nontraded real estate investment trust fundraise in history in 2019, as sales overall in the space reached the highest level in five years, according to investment banking firm Robert A. Stanger & Co. Inc.
Blackstone, one of several institutional sponsors revamping the nontraded REIT arena, raised $8.66 billion, representing a 72.9% market share, via its daily net asset value REIT, Blackstone Real Estate Income Trust Inc. Combined, nontraded REIT sponsors raised $11.88 billion in 2019. In 2018, sponsors — again led by Blackstone — raised about $4.6 billion.
The next-highest-selling sponsors in 2019 were Starwood Capital Group Holdings LP and Black Creek Group LLC, which raised $873.6 million and $464.3 million, respectively.
"The entrance of institutional asset managers into the non-traded REIT market has transformed the industry and will continue to fuel fundraising," Stanger said in a release. "As retail investors seek to diversify in the light of market uncertainty, they now have access to real estate funds managed by the same well-regarded firms that institutional investors turn to."
Kevin Gannon, the firm's chairman and CEO, said Stanger expects fundraising to hit the $15 billion mark in 2020, as the popularity of NAV REITs like Blackstone's, which offer liquidity and regularly updated valuations, swells. Sales of NAV REITs accounted for $11.02 billion of the $11.84 billion total in 2019.