Disappearing Sponsors

Last summer I watched And Then There Were None, a televised version of Agatha Christie's famous novel of the same name, where guests on a weekend stay at a desolate island mansion end up murdered, one by one.  Yesterday's news that Steadfast is exiting the non-traded REIT and credit business adds to the list of sponsors that are pulling their offerings.  I feel like I am watching a non-murderous version of And Then There Were None. 

Last year Steadfast tried to rebrand as Sitra Capital Markets, but the made-up name did not resonate and Steadfast made the decision to shuttered its Apartment REIT III and its Sitra Alcentra Global Credit Fund.  The REIT raised $197 million over two-and-a-half years and the credit fund raised just $36 million in about fifteen months. 

CNL is not stopping syndication, but did announce last week that it was not extending the offering for Healthcare Properties II, which only raised about $45 million since its inception in March 2016.  Like CNL, Griffin Capital is not stopping syndication but announced in mid-August the close of its Essential REIT II offering.  According to filings, the REIT has formed a special committee to review a potential strategic alternative.  Essential Asset II started its latest offering in September 2017, but only raised $7.3 million in 2018. 

Sponsors continue to suspend their offerings and/or exit the syndication business one-by-one.  Based on industry sales, there are so many candidates that I don't even want to start to guess what sponsor will be the next to yank its slow selling program.