The nontraded REIT industry, a $ 78 billion segment of the real estate investment trust market, raised $ 4.6 billion in new capital and purchased over $ 7.6 billion in commercial real estate properties during the first half of 2011, according to the latest research from Blue Vault Partners.
During the second quarter, the industry maintained its momentum as two new offerings became effective, capital inflows increased by 9% compared to the previous quarter, and over $ 4 billion in commercial real estate was purchased.
In addition, during the past 18 months, 22 new product offerings have been introduced. As a group, these new offerings represent 48% of all nontraded REITs that were raising capital during the second quarter of 2011.
?Blue Vault Partners recognized the inconsistency of comparing newly created REITs against those that have been in existence for 3 to 5 years and beyond,? noted BVP Managing Partner Vee Kimbrell. ?The creation of LifeStages in 2010 allowed us to place nontraded REITs in peer groups at similar points in their development for comparison and analysis by our subscribers.?
Based on historical data, the firm further refined the ranges of operating metrics for each of the five LifeStages which resulted in more distinct peer groups and more meaningful comparisons.
Nontraded REITs occupy a distinct niche among real estate investment trusts. While they are considered publicly registered companies, their shares do not trade on a stock exchange. Unlike their traded REIT counterparts, nontraded REITs raise capital while acquiring assets, usually starting from a blank slate. This unique characteristic creates the inability to initially compare results with traded REITs but also created the need for LifeStage analysis within the industry.
About Blue Vault Partners
Atlanta-based Blue Vault Partners offers quarterly nontraded REIT reports and annual research subscriptions for financial advisors, broker/dealers, REIT sponsors and others serving the industry. For more information about Blue Vault Partners' research and reporting services, call 877-256-2304 or visit http://www.bluevaultpartners.com.
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