Non-listed REITs raised only $1.1 billion in 2Q6, which is the lowest quarterly capital raise in 12 years. Jones Lang LaSalle Property Trust led all non-listed REITs with a $160 million capital raise in 2Q16.
Non-listed REITs achieved a milestone in 2Q16 with 52% of equity capital raised in modified commission shares, such as Class T and Class I shares. This is first quarter that modified commission shares represented the majority of equity capital raised.
Non-listed REITs had a record low 5.8% acquisition cap rates for 2Q16 YTD. Interest rates on new permanent debt financing increased to 3.8% for 2Q16 YTD, which could indicate higher acquisition cap rates in future quarters.
The Summit dNAV REIT Return Index reported a 1.27% quarterly return in 2Q16, as dNAV REITs returned to positive returns after a 0.02% quarterly loss in 1Q16. dNAV REITs should post positive returns in 2016 but will likely be below the 8.48% return in 2015.
Several real estate interval funds filed their semi-annual financial reports this summer with interval funds focused on investing in private real estate funds or residential mortgages continuing to report strong and stable investment returns.
Summit Investment Research's NAV Summary for open non-listed REITs highlights NAVs and key DCF assumptions for nine open non-listed REITs. Most open non-listed REITs have NAV growth consistent with overall market price increases, but two hotel non-listed REITs have significantly higher NAV increases than the overall market.
Interval funds have posted mixed results from their last annual or semi-annual report with total returns ranging from 8.9% to negative 11.7%. Three interval funds focusing on private institutional real estate lead the way with strong positive returns.
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