Sousou Partners hosted a conversation to discuss the merits of Non-Traded REITS (NTRs) with two well-respected experts and front runners in this space. Ghada Sousou was joined by A.J. Agarwal, President of BREIT and Senior Managing Director at Blackstone Real Estate Group, and John McCarthy, CEO of SREIT, Starwood Capital Group. A global audience joined this webinar representing LPs, Family Offices, Private Equity groups, Investment Managers and Fund Managers from Europe, the Americas, and the Middle East. A.J. and John shared their experiences and thoughts on why Blackstone and Starwood Capital entered the NTR space, how it has changed over time, and their views on the future of NTRs.
Whilst real estate has traditionally focused on investing capital for institutional investors, Blackstone and Starwood launched their Non-Traded REITs to address the underserved High Net Worth (HNW) space, providing HNW investors with quality real estate solutions that deliver attractive income and total returns. Since the NTR model was first launched decades ago, there have been a variety of changes to create REIT 2.0, which is characterised by higher quality managers, lower institutional-level fees, higher transparency, greater liquidity to investors, and strong performances to date.
Despite new entrants coming into the space, taking advantage of the vast pool of untapped capital from HNWs looking to invest in high quality real estate ($36 Billion of capital flowed into all NTRs in 2021 alone, three and a half times more than in 2020), the outstanding performance, alongside the prestige of the managers themselves, and the struggles of the fixed income market have proved highly attractive to investors. This is likely to become more pronounced this year due to rising interest rates, and 2022 is expected to be a strong year.
We would like to thank A.J. and John for their time and insights.