T
he Bluerock Total Income+ Real Estate Fund is facing a liquidity crisis, with investors seeking to sell back shares at a faster rate than the company can raise new funds. This has raised concerns that the fund may be forced to liquidate its real estate assets or list on a public exchange to meet investor demands.

    As an interval fund, Bluerock Total Income+ typically buys back up to 5% of clients' shares per quarter, but the current volume of redemptions is outpacing fundraising efforts. Analysts warn that listing on the NYSE could be challenging for the fund, which has seen its net asset value decline from $38 in summer 2022 to $25.25 as interest rates rose.

    The alternative investment industry has a history of illiquid real estate funds struggling to transition to daily trading on major exchanges. This can lead to uncertainty over share prices and potential losses for investors. Bluerock Total Income+ is seeking shareholder approval to convert from a closed-end interval fund to a listed closed-end fund, which would allow it to trade on the NYSE.

    The company's CEO, Ramin Kamfar, claims that this move was the result of "thoughtful deliberation" with investors, but analysts are skeptical. Kevin Gannon, chair and CEO of Robert Stanger & Co., notes that expenses will likely be lower as a listed company, but predicts that Bluerock Total Income+ will not be treated kindly in public markets.

    The real estate fund industry has been hit hard by rising interest rates since 2023, with many funds experiencing net outflows. The Bluerock Total Income+ Real Estate Fund is one of the largest and most prominent interval funds, with $4.1 billion in assets, but its listing plans have raised concerns about the potential risks to investors.