Nuveen jumps into changing nontraded REIT market

Nontraded REIT sales finishing 2017 near a low, though one variety generating new life

Dec 27, 2017 @ 2:15 pm

By Bruce Kelly

Another major money management firm is taking a run in the volatile nontraded real estate investment trust business, with Nuveen last week registering the Nuveen Global Cities REIT Inc. The company, which does not intend to list on an exchange, will provide limited liquidity each month to investors and is seeking to raise $5 billion, according to its filing with the Securities and Exchange Commission.

Such limited liquidity REITs that are not looking to list on an exchange or merge with another REIT, known as perpetual-life REITs, appear to be in vogue with sponsors and managers at the moment.

With nontraded REITs on track to post their worst sales since 2002, one of the few bright spots this year for the beleaguered industry has been the Blackstone Real Estate Income Trust, a perpetual-life REIT that launched this year and posted $1.4 billion in sales through September. That accounted for about one-third of nontraded REIT sales over the first nine months of the year, according to Robert A. Stanger & Co., an investment bank.

While the likes of Blackstone and Nuveen are jumping into the nontraded REIT industry, some long-time sponsors and managers are getting out as sales continue to slide from the peak of 2013. Independent broker-dealers sold $19.6 billion of the products that year.

W.P. Carey Inc., one of the companies instrumental in the evolution of the nontraded real estate investment trust business, said in June it was pulling out of the nontraded REIT market and stopped offering new products. Last month, Vereit Inc., a large listed real estate trust, said it was exiting the nontraded REIT business and selling Cole Capital, another nontraded REIT mainstay, for $120 million in cash and up to another $80 million in fees to be paid over six years based on Cole's future revenue.

"Nuveen Global Cities REIT is a newly organized corporation formed to invest primarily in stabilized, income-oriented commercial real estate located in and around leading cities in the United States, Canada, Europe and the Asia-Pacific region," the company said in a news release. "It intends to qualify as a real estate investment trust for federal income tax purposes."


What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video


Here's how we came up with our list of undiscovered talent in mutual funds

Senior columnist John Waggoner talks with assistant managing editor Susan Kelly about how hard work, curiosity and passion landed some fund managers on our list.

Latest news & opinion

SEC advice rule: Here's what you need to know

We sifted through the nearly 1,000-page proposal and picked out some of the most important points.

Cadaret Grant acquired by private-equity-backed Atria

75-year-old owner Arthur Grant positions the IBD for the 'next 33 years.'

SEC advice rule seeks to tighten reins on brokers

The proposed rule puts new restrictions on brokers, but it is still unclear how strongly the SEC is clamping down.

SEC advice rule hearing updates

Commission says a lot of work ahead, public will have 90 days to comment.

SEC advice proposal unveiling: Here's what to expect

Chairman Jay Clayton will initiate momentous action Wednesday, as the commission meets to debate a rule on broker and adviser standards.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print