The unlisted REIT market is getting crowded. As new players tap into the unlisted REIT sphere, the Big Four’s stranglehold on the market may be loosening. The Big Four refers to a quartet of dominant unlisted REITs consisting of Inland, CNL, Wells Real Estate Funds and W.P. Carey. Some of these sponsors, like Wells, have been around since the early 1980’s when real estate limited partnerships (RELPs) were in vogue.

The largest new entrant by dollar size is Hines’ $2.2 billion offering, which came to market last year. But over the past 18 months, a total of five new unlisted REITs — including Hines — have registered with the U.S. Securities and Exchange Commission. More are on the horizon, and the motivation is simple: Unlisted REITs, like their counterparts on the listed side of the aisle, continue to raise hordes of cash. Data from Robert Stanger & Co. pegged unlisted REIT fundraising at a staggering $6 billion in 2003. Their 2004 take was even better at $8.5 billion.

New faces, of course, mean added competition for investor dollars. That point is not lost on Behringer Harvard Funds, a Texas-based sponsor of the nation’s youngest unlisted REIT. On Sept. 28, the real estate investment firm formally launched its $400 million Behringer Opportunistic REIT I. The REIT plans to invest in value-add properties across the spectrum, primarily in the Sun Belt region, and to hold these properties for three to six years.

“We think this is a unique approach,” says Jason Mattox, senior vice president at Behringer Harvard Funds. “Most of the unlisted REITs focus on core properties in major markets, and we’re looking at a much more opportunistic approach.” That means buying office, hotel, retail, apartment and industrial properties that may have vacancy issues. Mattox says that buying stabilized assets in major markets is still a good strategy, but lately it’s been difficult to win deals that way.

“The idea is to look for opportunities all over, across all five property classes,” he says. If that sounds unique, guess again. Mattox says that many existing unlisted REITs—including Inland — are spinning off new REITs that invest across multiple property classes. The only difference, he says, is that these vehicles are chasing after stabilized rather than value-add assets.

For Mattox, however, the pitch is all about differentiation. “Nobody else is doing this right now,” he says. “There’s plenty of capital out there, but it’s going into the stabilized assets. This will be a popular fund.”