Non-Traded REITs Reach New Heights

Investors poured a record $3.69 billion into non-traded REITs in August 2021, according to a recent report from Robert A. Stanger and Co.

August 2021 was the third consecutive month where non-traded REITs saw inflows of greater than $3 billion and brought the year’s total inflows to $21 billion to date. According to Robert A. Stanger and Co, total inflows for 2021 will exceed $35 billion and surpass 2013’s record of $19.6 billion, if the current pace continues. 

According to Robert A. Stanger and Co, total inflows for 2021 will exceed $35 billion and surpass 2013’s record of $19.6 billion, if the current pace continues. The fund has raised over $14 billion through August, including over $2 billion in August alone.

So what’s driving the inflows into non-traded REITs? The same tailwinds fueling an overall investor shift into alternatives is the likely culprit. Many investors have large realized or unrealized capital gains after a healthy bull market run, and want to re-deploy these gains into alternative asset classes. Real estate (in the wrapper of a non-traded REIT) can offer investors income and future capital appreciation, as well as potential tax advantages.

Assuming bond yields stay at historic lows and higher inflation sustains itself, 2022 could break even the heady 2021 inflow records, making REIT sponsors happy indeed.