Factbox-Redemption wave hits personal REITs amid valuation jitters

NEW YORK (Reuters) – Traders trying to money out of non-traded U.S. actual property earnings trusts (REITs) have pushed redemptions to an all-time excessive, forcing personal fairness companies to impose curbs to dam withdrawals.

Blackstone (NYSE:) Inc, Starwood Capital Group and KKR & Co (NYSE:) Inc have introduced that they might cease traders from redeeming their investments after such withdrawals exceeded a preset 5% of the quarterly web asset worth of the REITs.

Graphic: Non-traded REIT fundraising and redemptions https://www.reuters.com/graphics/PRIVATEEQUITY-REITS/zgvobrdjapd/chart.png

The amount of such redemptions throughout U.S. non-traded REITs jumped to $12.2 billion in 2022, eight instances greater than the $1.5 billion that was withdrawn by traders within the earlier yr, based on actual property advisory agency Robert A. Stanger & Firm.

The spike in redemptions comes because the returns of personal REITs and their publicly-listed counterparts have diverged in current months.

REITs managed by Blackstone, Starwood and KKR reported returns of 8.4%, 6.3%, and eight.32% as of the tip of December. The publicly traded Dow Jones U.S. Choose REIT Complete Return Index fell 25.96% over the identical interval.

Graphic: Non-traded REIT fundraising market share https://www.reuters.com/graphics/PRIVATEEQUITY-REITS/znvnbzgjzvl/chart.png