NEW YORK (Reuters) – Investors looking to cash out of non-traded U.S. real estate income trusts (REITs) have pushed redemptions to an all-time high, forcing private equity firms to impose curbs to block withdrawals.
Blackstone Inc, Starwood Capital Group and KKR & Co Inc have announced that they would stop investors from redeeming their investments after such withdrawals exceeded a preset 5% of the quarterly net asset value of the REITs.
Graphic: Non-traded REIT fundraising and redemptions https://www.reuters.com/graphics/PRIVATEEQUITY-REITS/zgvobrdjapd/chart.png
The volume of such redemptions across U.S. non-traded REITs jumped to $12.2 billion in 2022, eight times more than the $1.5 billion that was withdrawn by investors in the previous year, according to real estate advisory firm Robert A. Stanger & Company.
The spike in redemptions comes as the returns of private REITs and their publicly-listed counterparts have diverged in recent months.
REITs managed by Blackstone, Starwood and KKR reported returns of 8.4%, 6.3%, and 8.32% as of the end of December. The publicly traded Dow Jones U.S. Select REIT Total Return Index fell 25.96% over the same period.
Graphic: Non-traded REIT fundraising market share https://www.reuters.com/graphics/PRIVATEEQUITY-REITS/znvnbzgjzvl/chart.png
(Reporting by Chibuike Oguh in New York; Editing by Chizu Nomiyama)