A Real-Estate Juggernaut Ran Off the Rails in 2023

From 2019 to 2022, a new type of real-estate fund became one of the hottest fundraising juggernauts on Wall Street by giving individual investors the chance to participate in soaring values of apartment buildings, warehouses and other types of commercial property.

Last year, those funds, known as nontraded real-estate investment trusts, ran off the rails. As concerns increased about the troubled commercial-property market, fundraising plummeted by the funds’ sponsors, many of them giant investment firms such as Blackstone and Starwood Capital Group.