Private capital in 2015 is at its most active in this cycle
Monetarex has aggregated and reviewed the data in 842 Form D filings submitted to the SEC for the real estate industry group as of December 31, 2015, of which 436 are currently active. Total offering amount stands at approximately $8.4 billion as of December 31, 2015, with the Total recorded capital commitments of $4 billion (or a 47% capital commitments rate). The capital commitment rate in Q4’15 is close to the historic average which has been around 50%. The total number of active Real Estate Private Placement filings experienced a huge jump across all sectors increased by about 26%, from 668 to 842 which could be explained by the firms pushing to close deals before the year-end. Average minimum investment for the quarter stands at approximately $155 thousand.
Private capital has been a lot more active in 2015 compared to 2014. Total offering amount in 2014 was $30.3 billion vs. $35.4 billion in 2015. That is a 16% year over year increase. To compare, the private capital activity in 2014 vs. 2013 increased only by 4%. At the same time the number of private offerings increased 13% year over year, leaving the per deal size roughly in line with 2014 results. The average deal size in 2014 was $11.9 million compared to $12.1 million in 2015, a 1% decrease. Despite the very sluggish fundraising environment for the past two quarters of 2015 the funding rate for the entire year is now at 43% compared to 40% in 2014 mainly because of the robust Q4’15 results.