- Ares Industrial REIT, Ares REIT and Invesco REIT raised roughly $692 million in Q3 and satisfied all of roughly $117 million in redemption requests.
- AIREIT raised $408 million versus $146 million in Q2 and cut leverage to about 40%, while AREIT’s leverage rose to 35% after $1.1 billion of acquisitions.
- Inflows far above redemptions suggest steady investor appetite for these vehicles, but Invesco REIT’s monthly raise slowed from $46.2 million in July to about $22 million in September.
Three nontraded REITs run by Ares and Invesco pulled in roughly $692 million of gross proceeds in Q3, while investors requested only about $117 million back, per AltsWire.
All three trusts said they met every withdrawal request. The figures come from NAV and portfolio updates the companies published in mid-October, AltsWire reported.
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AIREIT Nearly Triples Its Raise
Ares Industrial REIT, or AIREIT, collected about $408 million in Q3 versus roughly $146 million in Q2, AltsWire reported. Of that, $64 million came from DST interests bought with loans the REIT itself extends to some program investors, compared with just $6 million in Q2.
Investors asked to redeem $76 million across July, August and September, down from $105 million the prior quarter, and AIREIT paid all of it out on the first of August, September and October, per AltsWire.
Per-share NAV ended September at $13.3993, a 0.67% gain since June, putting fund NAV at $5.1 billion. Leverage fell to roughly 40% from roughly 45%, AltsWire reported.
AIREIT owns 270 industrial buildings spanning about 54 million SF in 31 markets. Occupancy improved to 90% from 88%, and AIREIT said trailing-12-month cash rent growth on about 9 million SF of fresh and renewed leases averaged 35%, with portfolio rents about 16% under market, AltsWire reported.
During the quarter, AIREIT bought eight industrial buildings for $222 million and set up a 51%-owned joint venture seeded with 14 buildings from its existing portfolio, per AltsWire.
AREIT Adds $1.1B of Properties
Ares Real Estate Income Trust (AREIT) brought in about $183 million in Q3, a sharp step back from about $646 million in Q2. That included $13 million in DST interests purchased with program loans, AltsWire reported.
Shareholders requested $27 million of redemptions, versus $43 million in Q2, and the REIT paid every dollar, per AltsWire.
AREIT spent about $1.1 billion on 18 properties: nine retail, four industrial, four residential and one self-storage asset. That buying lifted leverage to 35%, compared with 28% at the end of June, AltsWire reported.
NAV per share finished at $8.2841, 0.74% above June, with fund NAV at $3.95 billion. The portfolio spans 170 properties and about 36 million SF in 35 markets and is 95% leased, per AltsWire.
Comparable commercial leases saw cash rent growth of 26% over the trailing year, and 33% for industrial space. The board also lifted the monthly gross payout to $0.03583 a share, up from $0.03450, beginning in August, AltsWire reported.
Invesco’s Monthly Pace Slows
Invesco Real Estate Income Trust (INREIT) raised $101.1 million across its public and private offerings, including DST sales and reinvested distributions, compared with $33.3 million in Q2. Repurchase requests edged up to $13.8 million from $11.6 million, and INREIT said it fulfilled them all, AltsWire reported.
AltsWire noted that the quarterly total hides a slowdown. Working from the cumulative figures in monthly updates, proceeds stepped down from $46.2 million in July to roughly $33 million the following month and about $22 million by September.
The trust also closed on Knightdale Marketplace, a 323,113 SF center near Raleigh, North Carolina, at an all-in cost of $87.2 million, counting closing and leasing expenses, per AltsWire. CRE Daily covered it when Invesco bought the Raleigh retail center.
INREIT’s Class I shares closed September at an NAV of $26.2613, 0.21% below August’s level, while total NAV rose to $669 million from $663.1 million. Leverage ticked up to 28% from 25%, AltsWire reported.
To support fundraising, INREIT’s adviser began funding bonus shares on Oct. 1 worth 5% of what each new investor subscribes, for newcomers buying Class T, S, D or I shares. The bonus drops to 3% for subscriptions accepted from Jan. 1 through March 1, 2027, and the adviser pays from its own assets rather than the REIT’s, per AltsWire.
Direct real estate makes up 81% of INREIT’s gross assets across 73 properties and 11.6 million SF in 32 markets, 94% occupied on a weighted-average basis. Private real estate credit is about 15%, AltsWire reported.
Why It Matters
Redemptions are the pressure point for nontraded vehicles, and these three covered every request with proceeds to spare. Inflows ran at nearly six times outflows, which suggests investor appetite held up in the quarter.
The picture is not uniform across the industry. Elsewhere, BCRED held a 5% repurchase cap as requests hit $4.3 billion, CRE Daily reported. AltsWire also cautioned that each REIT measures leverage its own way, so the ratios are not directly comparable.
What’s Next
Watch whether INREIT’s slowing monthly raise continues into Q4 and whether its adviser-funded bonus shares, which step down to 3% in January, change that pace.
AREIT’s higher leverage after its $1.1 billion buying spree is the other number to track in the next NAV updates.
