- Private placement NAV REITs posted a 1.2% total return in Q1 2025, trailing public indices but demonstrating resilience amid broader market volatility.
- Capital formation for private placement REITs is accelerating, with newer vintages outperforming older public NAV REITs affected by a high-rate environment.
- Major NAV REIT players like Cohen & Steers, PGIM, FS Credit, and Blackstone led various performance categories across one-, three-, and five-year periods.
- Lifecycle REITs struggled, with the Stanger Lifecycle REIT Total Return Index down 7.9% in Q1 2025, though select players like Strategic Storage Trust VI posted standout results.
Private placement NAV REITs are gaining traction again after a turbulent period, according to a new report by Robert A. Stanger & Company, Inc. Early 2025 returns indicate growing investor confidence, even as public indices wrestle with market shocks like the recent “Liberation Day” event, per Alts Wire.
Capital Formation Gaining Steam
In the first quarter of 2025, the Stanger NAV REIT Total Return Index posted a 1.2% return, a bit behind the 1.6% average of public indices. Despite this, private placement REITs are beginning to dominate the space as new vintages outperform older counterparts burdened by higher interest rates, noted Stanger’s CEO Kevin T. Gannon.
By April 25, public indices had dipped to a -2.1% year-to-date return, making private NAV REITs look more stable by comparison.
Performance Leaders
Among NAV REITs:
- Cohen & Steers Income Opportunities REIT led Q1 with a 3.6% three-month return.
- PGIM Private Real Estate Fund Inc. topped the one-year total return rankings.
- FS Credit Real Estate Income Trust maintained its three-year performance leadership for the third consecutive quarter.
- Blackstone Real Estate Income Trust reclaimed the five-year total return crown with an 11% annualized return.
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Liquidity Matters
Since early 2022, real estate alternatives have redeemed $52B of investor capital, while BDC fundraising jumped by $67B. Private NAV REITs have navigated redemption pressures through liquidity management, asset sales, and strategic moves—validating the strength of the model, said Gannon.
Lifecycle REITs Struggle
In contrast, Lifecycle REITs had a rough start to 2025. The Stanger Lifecycle REIT Total Return Index dropped 7.9% in Q1 and is down 6.7% over the past year.
Still, certain names outperformed:
- Strategic Storage Trust VI led the one-year rankings with a 27.3% return.
- Procaccianti Hotel REIT rose to the top of the three-year rankings.
- Lightstone Value Plus REIT V regained the top five-year performance spot.
Why It Matters
Private placement NAV REITs are showing signs of renewed strength just as public markets encounter turbulence. Their demonstrated liquidity management and stable performance may attract more investor attention through 2025.
What’s Next
With ongoing market volatility and interest rate uncertainty, expect capital to increasingly flow into private placement REITs, especially as newer vintages continue to outperform.
