Ares, Invesco Nontraded REITs Raise Nearly 6x Q3 Redemption Requests

Three nontraded real estate investment trusts paid every redemption request they received in the third quarter while raising nearly six times as much capital as shareholders asked to withdraw, according to net asset value and portfolio updates the REITs released the week of Oct. 12.

Ares Industrial Real Estate Income Trust (AIREIT), Ares Real Estate Income Trust (AREIT), and Invesco Real Estate Income Trust (INREIT) together reported approximately $692 million in gross proceeds for the quarter ended Sept. 30, against approximately $117 million in redemption requests. Each REIT said it satisfied all requests. The gross proceeds figures include distribution reinvestment plan proceeds and sales through each sponsor’s Delaware statutory trust program. Each REIT calculates leverage using its own methodology, and the ratios are not directly comparable across the three companies.

AIREIT Nearly Triples Its Raise

AIREIT raised approximately $408 million in the third quarter, up from approximately $146 million in the second quarter, the company said. The total includes $64 million of DST interests financed by DST program loans, which the REIT provides to certain investors in its DST program. That compares with $6 million of loan-financed DST sales in the second quarter.

Redemption requests for July, August, and September totaled $76 million, down from $105 million in the second quarter. AIREIT redeemed the requests in full on Aug. 1, Sept. 1, and Oct. 1.

NAV per share was $13.3993 as of Sept. 30, up 0.22% from $13.3703 at Aug. 31 and up 0.67% from $13.3101 at June 30. Aggregate fund NAV was $5.1 billion. The REIT reported leverage of approximately 40%, down from approximately 45% at June 30.

AIREIT’s portfolio included 270 industrial buildings totaling approximately 54 million square feet in 31 U.S. markets, and was 90% occupied and 91% leased, up from 88% occupied at June 30. During the quarter, the REIT acquired eight industrial buildings for an aggregate contractual purchase price of $222 million and formed a joint venture, in which it holds a 51% interest, seeded with 14 of its industrial buildings.

AIREIT said rent growth on comparable leases averaged 35% on a cash basis over the trailing 12 months, on approximately 9 million square feet of new and renewal leases, and estimated that portfolio rents were 16% below market.

AREIT Leverage Climbs After $1.1 Billion in Acquisitions

AREIT raised approximately $183 million in the third quarter, including $13 million of DST interests financed by DST program loans, the company said. That was down from approximately $646 million in the second quarter.

Redemption requests for the quarter totaled $27 million, down from $43 million in the second quarter, and were redeemed in full.

AREIT reported a leverage ratio of 35% as of Sept. 30, up from 34% at Aug. 31 and 28% at June 30, the figure AltsWire reported in August. During the third quarter, the REIT acquired nine retail properties, four industrial properties, four residential properties, and one self-storage property for an aggregate contractual purchase price of $1.1 billion.

NAV per share was $8.2841 as of Sept. 30, up 0.09% from $8.2769 at Aug. 31 and up 0.74% from $8.2229 at June 30. Aggregate fund NAV was $3.95 billion. In May, AltsWire reported AREIT’s April NAV per share at $8.164.

The portfolio included 170 properties totaling approximately 36 million square feet in 35 U.S. markets and was 95% leased. AREIT said rent growth on comparable commercial leases averaged 26% on a cash basis over the trailing 12 months, including 33% for industrial properties.

AREIT’s board increased the monthly gross distribution to $0.03583 per share beginning in August, from $0.03450 per share.

INREIT Raise Triples From Q2

INREIT raised $101.1 million in gross proceeds in its registered and private offerings in the third quarter, including sales through its DST program and distribution reinvestment, the company said. That was up from $33.3 million in the second quarter.

Repurchase requests for July, August, and September totaled $13.8 million, up from $11.6 million in the second quarter. INREIT said it fulfilled all requests.

INREIT’s quarterly total masked a slowing monthly pace. Based on the cumulative quarter-to-date figures in its monthly updates, the REIT raised $46.2 million in July, about $33 million in August, and about $22 million in September. In September, INREIT acquired Knightdale Marketplace, a 323,113-square-foot shopping center in the Raleigh, North Carolina, area, for $87.2 million including closing and leasing costs.

INREIT’s Class I NAV per share was $26.2613 as of Sept. 30, down 0.21% from $26.3155 at Aug. 31. Total NAV was $669 million, up from $663.1 million. The REIT reported a leverage ratio of 28%, up from 25% at Aug. 31.

On Oct. 1, the REIT’s adviser began funding bonus shares equal to 5% of the subscription amount, excluding upfront selling commissions, for new Class T, S, D, and I investors. The bonus steps down to 3% for subscriptions accepted Jan. 1 through March 1, 2027. The adviser pays for the bonus shares from its own assets, not the REIT’s.

INREIT’s direct real estate portfolio included 73 properties totaling approximately 11.6 million square feet in 32 markets, with weighted average occupancy of 94%. Direct real estate represented 81% of gross assets, and private real estate credit approximately 15%.

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