Inland Private Capital is setting up a new nontraded real estate investment trust that will initially launch with a portfolio of principally medical office buildings but plans to also focus on acquiring self-storage and student housing properties.
The Oak Brook, Illinois-based firm has filed preliminary paperwork for IPC Alternative Real Estate Income Trust with the Securities and Exchange Commission with the ability to raise up to $1.25 billion for the REIT on an ongoing basis.
The alternative property sectors the REIT intends to focus on have proved resilient through various economic cycles and outperformed in recent market turmoil, including the global financial crisis of 2008 and 2009 and the COVID-19 pandemic, according to Inland’s filing.
In the healthcare sector, an aging population that continues to grow and live longer has driven demand for healthcare properties, including medical office buildings. Tenant demand for medical office building space also continues to increase with the shift to outpatient care that results in health systems seeking convenient locations and advancements in healthcare technology that requires additional space, according to Inland.
While such properties may have investor appeal, nontraded REITs have had a tough time this year raising new capital. Nontraded REITs reported $485 million of fundraising in April, the lowest level since August 2020 in the beginning of the pandemic, according to the latest monthly report by investment banking firm Robert A. Stanger and Co.
Despite that, Inland is not alone in testing the waters for a new nontraded REIT. BentallGreenOak has taken steps to launch BGO Industrial Real Estate Income Trust that would give the REIT the ability to raise up to $5 billion on an ongoing basis.
As of June 16, the REIT’s operating portfolio consists of 30 medical office properties and one student housing property. The medical office portfolio totals 746,601 square feet of medical office and one student housing property with 406 student housing beds. These properties are in 14 markets throughout the United States.
The properties were folded into the new REIT from various other Inland investment funds, according to the filing.
Inland did not respond to a request for additional information.