The largest nonlisted effective REITs
Effective REITs, ranked by 1Q equity raised
| Rank | Company | 1Q ’12 equity raised ($M) | 1Q ’12 invested assets ($M) | Original share price | 1Q ’12 implied cap rate | Current divident yield | 1Q ’12 FFO payout ratio* |
|---|---|---|---|---|---|---|---|
| 1 | Cole Credit Property Trust III | $849.4 | $5,843.6 | $10 | 7.71% | 6.50% | 94% |
| 2 | Industrial Income Trust | $235.4 | $1,187.9 | $10 | 6.88% | 6.25% | 127% |
| 3 | American Realty Capital Trust III | $216.7 | $268.2 | $10 | 7.68% | 6.60% | 139% |
| 4 | CB Richard Ellis Realty Trust | $176.5 | $2,273.6 | $10 | 6.90% | 6.00% | 119% |
| 5 | Corporate Property Associates 17 – Global | $172.0 | $3,113.0 | $10 | 7.58% | 6.50% | 122% |
| 6 | Inland Diversified Real Estate Trust | $127.4 | $1,103.2 | $10 | 7.44% | 6.00% | 94% |
| 7 | Hines Global REIT | $89.5 | $1,452.0 | $10 | 7.71% | 6.50% | 140% |
| 8 | NorthStar Real Estate Income Trust | $77.4 | $131.2 | $10 | 8.92% | 8.00% | 195% |
| 9 | Griffin-American Healthcare REIT II | $74.0 | $680.1 | $10 | 9.45% | 6.50% | 84% |
| 10 | American Realty Capital Healthcare Trust | $62.6 | $195.3 | $10 | 8.78% | 6.80% | 93% |
| 11 | Apple REIT Ten | $62.1 | $485.3 | $11 | 9.16% | 7.50% | 148% |
| 12 | Wells Core Office Income REIT | $57.2 | $398.5 | $25 | 8.60% | 6.00% | 113% |
| 13 | KBS Real Estate Investment Trust III | $48.7 | $209.2 | $10 | 7.34% | 6.50% | 259% |
| 14 | KBS Strategic Opportunity REIT | $40.6 | $205.3 | $10 | N/A | 3.00% | N/A |
| 15 | United Development Funding IV | $32.2 | $173.3 | $20 | 13.41% | 8.20% | 96% |
| 16 | CNL Healthcare Trust | $27.6 | $40.9 | $10 | 7.82% | 4.00% | Negative |
| 17 | Steadfast Income REIT | $24.8 | $134.3 | $10 | 8.52% | 7.00% | 184% |
| 18 | Resource Real Estate Opportunity REIT | $24.4 | $65.5 | $10 | N/A | 6% Stock | N/A |
| 19 | Carter Validus Mission Critical REIT | $22.7 | $146.6 | $10 | 8.07% | 7.00% | 107% |
| 20 | KBS Legacy Partners Apartment REIT | $21.7 | $64.4 | $10 | 7.71% | 6.50% | Negative |
| *Based on Nareit-defined funds from operations and adjusted for acquisition costs and expenses. N/A = not available | |||||||
Commentary by Michael Stubben, President of MTS Research Advisors: The above table highlights the equity raise, dividend yield and FFO payout ratio for the top 20 open nonlisted REITs in the first quarter. The top 20 nonlisted REITs raised nearly $2.4 billion in the third quarter of 2011, which represented over 90% of all nonlisted REIT fundraising. Fundraising in 1Q 2012 jumped 30% from 4Q 2011, largely due to the massive fundraising close of Cole Credit Property Trust III. The top fundraising nonlisted REITs include two debt REITs (NorthStar and United Development IV) and two opportunity REITs (KBS Strat Opp and Resource Real Estate). Two important metrics — implied cap rate and FFO payout ratio — are highlighted above. The implied cap rate highlights the average gross yield on these nontraded REITs’ commercial real estate investments, and the FFO payout ratio highlights the dividend as a percent of FFO. Nonlisted REITs should have a FFO payout ratio below 100%, as they effectively deploy their equity capital and build up their portfolios.
Source: MTS Research Advisors
View the largest nonlisted closed REITs.
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