© Reuters. FILE PHOTO: The ticker and trading information for Blackstone Group is displayed at the post where it is traded on the floor of the New York Stock Exchange (NYSE) April 4, 2016. REUTERS/Brendan McDermid/File Photo
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 (NYSE:) Inc, Starwood Capital Group and KKR & Co (NYSE:) 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across U.S. non-traded REITs jumped to $12.2 billion in 2022, eight times more than the $1.5 billion that was withdrawn by investors in the previous year, according to real estate advisory firm Robert A. Stanger & Company.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