Ares, Invesco nontraded REITs pay all Q3 redemption requests

Three nontraded REITs reported about $692 million of gross proceeds in the third quarter and said they paid every redemption request they received. The figures come from net asset value and portfolio updates released the week of Oct. 12 and reported by AltsWire. That works out to roughly $5.90 raised for each $1 shareholders sought back, against about $117 million of requests.

Ares Industrial Real Estate Income Trust supplied $408 million of the total, up from about $146 million in the second quarter. Its requests for July, August and September totaled $76 million, down from $105 million in the prior quarter. The REIT said it redeemed them in full on Aug. 1, Sept. 1 and Oct. 1, with the final settlement after the period close. NAV per share was $13.3993 at Sept. 30, up 0.67% from $13.3101 at June 30, on aggregate fund NAV of $5.1 billion. The REIT reported leverage of about 40%, down from about 45% at June 30.

AREIT raised about $183 million, including $13 million of loan-financed DST interests, down from about $646 million in the second quarter. Requests fell to $27 million from $43 million and were redeemed in full, so coverage was about 6.8 times requests at AREIT versus about 5.4 times at AIREIT. Its leverage ratio was 35% at Sept. 30, up from 28% at June 30 on the company's own methodology; the updates' leverage figures are not comparable across the three REITs, the source notes.

According to the source, about $77 million of the reported proceeds — roughly 11% of the combined total — was funded by REIT credit rather than unaffiliated subscription cash. Both Ares totals include distribution reinvestment plan proceeds and sales through each sponsor's Delaware statutory trust program. The $77 million consists of $64 million from AIREIT and $13 million from AREIT as DST interests financed by DST program loans the REITs provide to certain investors. AIREIT's loan-financed DST sales rose from $6 million in the second quarter, accounting for roughly 22% of its $262 million sequential increase.

The updates do not break out Invesco Real Estate Income Trust's own proceeds or requests. Subtracting the two Ares figures from the combined totals leaves about $101 million of gross proceeds and roughly $14 million of requests — residuals, not reported numbers, and ones that would put INREIT's coverage above 7 times.

Ares Strategic Income Fund, an interval fund, reported third-quarter requests equal to 11.6% of the fund and capped them, as this publication reported on Oct. 1.