Unlisted REITs Emerge as Investor Powerhouse

NEW YORK CITY-Public REITs may have gotten the bulk of the attention this year, but the non-traded REIT sector has emerged as a formidable force in the investment arena. According to data compiled for the year by Real Capital Analytics, these vehicles are now the second-largest net investor group in 2009 among all property types, and are steadily attracting investor dollars as well.

No fewer than 12 investment managers are raising funds for unlisted REITs this year, accounting for more than $20 billion in capital–particularly from private and individual investors looking to place money into real estate. At this rate, the non-traded REIT pool will become almost as large, in terms of investment capital, as public REITs.

Whereas public REITs have sold some $10 billion in assets this year, unlisted REITs shed just $500 million overall, resulting in a net 2009 investment of $2.9 billion–second only to the developer and owner/operator group.